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Economy + policy

1
Rural Market

Rural economy will be India’s lifeline in this epic crisis. After many years, farmers are smiling.

As the pandemic cripples urban centres, India will have to rely on its farm economy to provide relief to millions. Bharat or rural India appears to be smiling now, aided by bountiful rains, bumper harvests, and government schemes. Some luck with monsoon this year, and continued government support, will be a shot in the arm for farmers – and India.

headset AUDIO SUMMARY . 01:22
Banking

Loan-waiver demands for the industry are unrealistic. India, and its banks, can’t afford it.

Public sector banks (PSBs) don’t have the financial muscle to afford large-scale loan waivers as a lifeline to the Indian industry. It’ll eventually have to be funded by the government, which is terribly stretched at the moment. Such a move will restrict PSBs’ lending activity and can impact economic recovery – the last thing India needs at this critical juncture.

headset AUDIO SUMMARY . 01:29
Policy and regulations

The cost of a unilateral ban: The pesticides industry stares at an INR9,600 crore hole in business

The agri ministry's decision to ban 27 commonly used generic pesticides has stirred up a hornets' nest. A further review is necessary, as most of the pesticides falling under the proposed ban are highly cost-effective compared to their so-called alternatives. However, an addendum allowing export of the same pesticides has brought some relief to the industry.

Jobs

The government’s big skilling drive: RPL aims to raise incomes for millions swiftly in a new world

Around 6 million informal-sector workers are already enrolled under the Recognition of Prior Learning (RPL) programme. It promises to upskill large swathes of the population swiftly, sometimes in just two to three days. Some 100 companies, including L&T, Patanjali, and Berger Paints, have provided RPL certification to employees. The government claims the programme is making a difference.

Economy

Don’t cut direct stimulus fearing a debt overload. It can severely dent India’s economic recovery.

Contrary to the perception that higher stimulus will lead to an unsustainable debt burden, the reality might be just the opposite. By triggering growth, a debt-funded stimulus enables higher revenues for the government, reducing the size of borrowing programmes. The ideal strategy for the Modi government would be a direct and targeted stimulus funded by lower-yielding debt.

Logistics

No money to bring trucks back on road, pay EMIs: The lockdown burden could crush many transporters

Transport companies have suffered huge losses in the last two months. After the lockdown, many unorganised operators, who comprise 85% of the market, may not be able to survive due to measly demand, low freight rate and capacity utilisation, and their inability to arrange for upfront costs. The stimulus and a revised definition for MSMEs may not help.

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