New Delhi: To revive the dwindling economy at this time of coronavirus pandemic, Kotak Mahindra Bank chief executive Uday Kotak has two suggestions to make. Speaking to NDTV, he said that the country needs to print cash to support the economy that has been damaged by the protracted COVID-19 crisis. Giving further suggestions, the Kotak Mahindra Bank chief said this needs to be done in two parts – one for those at the bottom of the resources pyramid, and the other for the protection of jobs for sectors affected by the pandemic.
He said this is the time to expand the balance sheet of the government which is duly supported by the Reserve Bank of India for monetary expansion or printing of money. However, he said if this cannot be done now, then when can it be done?
Giving ideas on direct cash transfers to the poor, Kotak recommended a government expenditure of up to 1 per cent of the gross domestic product, or between Rs 1 lakh crore and Rs 2 lakh crore. He also added that the medical benefits to the poorest of the poor need to be given as well.
Not just the health infrastructure, the second wave of the pandemic has hit the recovering economy very badly. Even though the country started the lockdown relaxations in January, but the second wave led to a new round of restrictions, which has put brakes on businesses once more.
Giving further details, Kotak said two categories of businesses are apparent because of the pandemic at the moment –one is those going through a transitory period because of Covid and are likely to survive the pandemic, and the second are those that are structurally challenged because Covid has changed the business model.
He said that the Centre had last year announced a very successful lending scheme by banks for the stressed sectors. “I’d recommend that the scheme be expanded from the current Rs 3 lakh crore to Rs 5 lakh crore and more sectors be included so that greater support to the economy can be given as soon as possible,” Kotak told NDTV.