COVID Files: Hit on Indian Treasury

Corona virus has proven to be the deadliest threat to whole world. It is on a killing spree, death toll climbed up to 2,00,000 with more than 6,000,000 active cases all around the world. India is also hit hard by the pandemic, said to have reached 6th place among corona hit countries. And to combat this deadly virus government opted for many policies. Yet nature is posing new challenges…... 

CHALLENGES

Not only the pandemic, India was hit by many other issues as well like: -

1. Cyclones
2. Locusts Attack
3. Communal Riots
4. Labour Migrants

Taking all the things into consideration, these problems burn a hole in the pocket of the government. Which will directly hit the funds availability. 2020 has not been the year when it comes to India’s economy.

As the country is on a lockdown from the past 65 days, there has been a decline in tax collection rate as people are buying less. This gives rise to mass unemployment and distress in the country. Despite of all the current measures taken by state and central government, the country is in a great danger with 27.11% unoccupied personnel.  

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings needed by the government. And it has risen to 5.07% which means economy is not doing good in terms of borrowings by the government. 

From 2015, Economy has been dripping down and with all these contingencies the situation has become worse. The condition of Government in terms of funds availability could be made out by the recent news that Government has borrowed 2 times in the same month. Which adds up to 12 lakh crore debt from world bank and International monetary Fund’s respectively.  

INDICATORS

• Fastest crash for the Sensex - The current Sensex fall of nearly 32% has been the fastest—from 14,953 on 14 January to 28,288 on 19 March—compared with historical dips.
• Be it the dotcom bust, 2008 crisis or Harshad Mehta scam, the falls were gradual extending several months.
• Rs 25,938 crore FII outflow hits markets
• In line with the Foreign Institutional Investors’ response during a global financial crisis, there was a heavy sell-off in the Indian equity markets, with a net outflow of Rs 25,938 crore between 1 January and 18 March.
• Rupee hits a new low
• As Asian investors dumped currencies, stocks and bonds to buy the US dollar, rupee fell to a new low of 75.03. with GDP decline to 3.8.

CONCLUSION

All these are visible indicators which shows that government has lack of funds, and it is the time to ponder and make new policies which increases stable financial position. As when people will spend economy keeps on moving and we will come out of the grave of this economic depression.

You, as our audience, can suggest some key changes or innovations, on our networking platform that can be brought in by the appropriate agencies. Law Community is a junction where all legal professionals come together, this is a way to make your voice heard.

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