Never Seen a Slowdown Like This, Government Must Attack Problem With a Sledgehammer
- 3 years ago
Vinayak Chatterjee (Chairman & Co-Founder at Feedback Infrastructure Services Pvt Ltd.) says the country is facing a massive demand spiral. The only way for the government to address it is with a ‘sledgehammer’ of stimulus, he believes.
In an interview with Mitali Mukherjee, Mr Chatterjee said the infrastructure space was facing multiple challenges. On the one hand, labour mobilization was a big concern; migrant labour has been psychologically wounded and left with a deep sense of abandonment. Hence, enabling them to return to sites will not be an easy task.
On the other hand, he believes working capital issues are likely to snowball in the months to come. Just depending on banks will not solve the liquidity problem and there is an urgent need to create a ‘Renewal Fund’, outside of the Union Budget document to help credit flow back into the system.
Mr Chatterjee said the government now needs to think out of the box and work out a mechanism to detach support and stimulus measures from the Union Budget.
The money will need to be raised through the dual mechanisms of printing more currency and reaching out to friendly international organisations and countries for capital loans.
He believes the cash support the economy needs is close to Rs 30 lakh crores ( approx. 14% of GDP).
Mr Chatterjee also said he is not in the camp that is optimistic about a “V” shaped recovery. Instead, he feels recovery will be slow and gradual for India, that will also need a tremendous amount of demand stimulus.
In an interview with Mitali Mukherjee, Mr Chatterjee said the infrastructure space was facing multiple challenges. On the one hand, labour mobilization was a big concern; migrant labour has been psychologically wounded and left with a deep sense of abandonment. Hence, enabling them to return to sites will not be an easy task.
On the other hand, he believes working capital issues are likely to snowball in the months to come. Just depending on banks will not solve the liquidity problem and there is an urgent need to create a ‘Renewal Fund’, outside of the Union Budget document to help credit flow back into the system.
Mr Chatterjee said the government now needs to think out of the box and work out a mechanism to detach support and stimulus measures from the Union Budget.
The money will need to be raised through the dual mechanisms of printing more currency and reaching out to friendly international organisations and countries for capital loans.
He believes the cash support the economy needs is close to Rs 30 lakh crores ( approx. 14% of GDP).
Mr Chatterjee also said he is not in the camp that is optimistic about a “V” shaped recovery. Instead, he feels recovery will be slow and gradual for India, that will also need a tremendous amount of demand stimulus.