The Revival Conundrum

Along with a patchwork of band-aids, a smart combination of monetary and fiscal measures can get the ailing economy back into the pink of health.

The government's five booster shots are expected to fix the sick and slowing economy. A little over the past one month, Union Finance Minister Nirmala Sitharaman has announced a slew of measures to pump-prime the tottering economy.

Dubbed as a mini-Budget, the series of stimulus packages unveiled by the finance minister in successive press conferences have tried to address woes in the automobile, banking, finance, real estate and export sectors. Besides, Ms Sitharaman has slashed Corporate Tax rates to get companies to deploy the money thus saved into investment.

These steps have come after the country's Gross Domestic Product (GDP) growth slowed to 5 per cent in the first quarter of FY20 (April-June 2019) - the lowest in 25 quarters or in six years. According to many economists, including Manmohan Singh, the former prime minister and renowned economist, key Indian sectors are facing a slowdown that seems far more than a cyclical occurrence.

Measures galore

After in denial of the slowdown for months, the government finally acted, with the finance minister unfurling the first set of stimulus package on August 23. Accordingly, Ms Sitharaman rolled back the super-rich tax on foreign and domestic equity investors that it had introduced in the Union Budget of July. Along with the withdrawal of the additional levy on foreign portfolio investors (FPIs), enhanced surcharge levied on long- and short-term capital gains on equities would also end. The tax measures would cost the exchequer Rs 1,400 crore.