Chief executive officer of Kotak Mahindra Bank, Uday Kotak states the urgent requirement to print currency in the country. In an interview with NDTV, Kotak focused on the printing of cash. He speaks of how important it is to act as a backbone for the fallen economy.
He further adds that the expansion should be bifurcated into two sections: firstly for the ones at the bottom of the resources pyramid. And for job protection of sectors affected amidst the pandemic.
Mr Kotak said, “In my view, this is the time to expand the balance sheet of the government, duly supported by the RBI (Reserve Bank of India)… for monetary expansion or printing of money. Time has come for us to be doing some of that… If not now, when?”, reports NDTV.
Government expenditure for up to 1 per cent of the GDP was recommended by the CEO for direct cash transfers to the needy. Also expenditure between Rs 1 lakh crore and Rs 2 lakh crore would be beneficial as per Mr. Kotak.
The banker emphasized that the increased expenditure would enable the consumption at the bottom most part of the pyramid strengthen. Besides, medical benefits for the poor and needy were also proposed by him.
Coronavirus second wave and a falling economy
The second wave of coronavirus took massive lives and has spread widely all the country. The economy that had just started to rebuild again suffered due to localized restrictions by the Government.
Uday Kotak asked people to support the sufferers in whatever way they can. He said, “Do whatever you can to support the first one so that they survive this and come out. For the second one, it’s a much more difficult one.
If we believe they can’t sustain in this new world, we have to find appropriate solutions that take care of human sufferings, but you cannot make unsustainable business drag down the economy in the long term,”
NDTV quotes the statement given by the banker which says, “The government last year announced a very successful lending scheme by banks for the stressed sectors. I’d recommend that the scheme be expanded from the current Rs 3 lakh crore to Rs 5 lakh crore and more sectors be included so that greater support to the economy can be given as soon as possible.”
As of now the coronavirus cases in the country has surpassed 2.72 crore. However, the recovery rate has also risen up to 2.44 crore. Meanwhile, the fatalities caused till now are asserted to be 3.11 Lakh.
As per a study by Azim Premji University, around 230 million Indians have fallen into the poverty circle as a result of a lock on businesses last year. Among the young men and women are the majority sufferers. More than 100 million people were terminated and 15 per cent were unable to find jobs as stated by the study.
Moreover, the report requests the Government to stimulate the financial services. Also, the Centre should provide free groceries and cash transfers to the most affected. The proposal for launching an employment program was also stated by the report.