Economists are pitching for the second round stimulus package focused on small businesses. They are of the view that even after the partial lifting of the lockdown demand tends to remain elusive. They are empathizing that a second stimulus package should be released for MSME’s as this is the right time for such an action.

Commenting on the earlier released stimulus package of Rs 20, 000 Crore as a ‘parismonious’ spending, they are insisting that government should dole out another set of fiscal stimulus for small businesses as we are still witnessing slump in demand.

“What has happened to businesses? Lockdown is lifted, but the demand doesn’t exist. What you are going to see is a bloodbath among MSMEs (micro, small and medium enterprises). Do we need stimulus? Yes!” Pronab Sen, Programme Director for the International Growth Centre (IGC)-India Programme and former chief statistician said during a seminar organized by academic institution SPJIMR here. He said if the government intends to introduce a package, it has to be done at the earliest because this is the time when the businesses need it the most, and warned that not doing so can stoke inaction by late 2020 or early 2021 as there will be no availability of goods.

Rathin Roy, the director of the Finance Ministry-supported think tank NIPFP, said the government may have hesitated in providing monetary stimulus in the rst package and instead promised long-pending reform measures, in a bid to signal that it wants to be hands-o and leave it to business. If it was so, there is a need to deliver on the promised reforms which can help in the inow of capital, Roy said.

Mr.Anantha Nageswaran V Anantha Nageswaran, a part-time member of the Economic Advisory Council to the Prime Minister  also acknowledged that the first stimulus package was paltry sum of amount and it didn’t have any effect on the day to day affairs of the already impacted businesses. He added that India needs to get rid of the various unwanted rules and compliance burdens in order to compete with china.

“Emulating China from where we are with the kind of high cost of production and the legislative and compliance burdens that our businesses carry, is not going to happen,” Nageswaran, who is associated with the Krea University, said at a seminar organised by the academic institute SPJIMR. “That is why Vietnam, Mexico and Bangladesh are getting the industry moving out of China and not India. We are not there yet,” he added.

Sen said the stimulus measures of up to Rs 1,000 per person per month extended through the direct benet transfer are not suficient and stressed that a transfer of over Rs 3,000 is essential if the nal aim is to drive up demand as the current quantum of money is only enough for survival. “. “Sometimes, you have to have a leap of faith and have to take action. This is an action which you can roll back,” he said, while pitching for a second round of stimulus.