Policy Response to Post Covid-19: An Analytical Study of Indian Monetary and Fiscal Policies

Abstract

The Covid-19 pandemic has emerged as a traumatic experience worldwide. It has impacted economic activities adversely, and led to health crisis, job losses, affected trade & transport, market selloff, collapse of export revenues and financial ambiguity. The Indian economy has also reeled under the brunt of Covid-19 which impelled the government to fight by initiating community awareness programs, social distancing measures, lockdown, testing and quarantine plans & actions and support packages for the public etc. Government of India also introduced stimulus packages to revitalize the financial system and amended fiscal and monetary policies such as Atmanirbhar Bharat Mission, Pradhan Mantri Garib Kalyan Yojana, PSU policy, deregulation of the agricultural sector, commercialisation of coal mining, etc to reduce the impact of the pandemic. Overall, the proactive measures undertaken during the pandemic have laid the foundations for economic recovery to gain momentum going ahead. But on the contrary all packages increased the capital expenditure of the country and increased economic hardship. Therefore, it is suggested that government should focus on measures that lead to decline in the expenditure and yield high revenues by raising the tax revenue buoyancy through improved compliance and increasing receipts from monetisation of assets and strategic disinvestments.