NEW DELHI: Time is ripe to implement India’s version of “Helicopter Drop” fiscal support scheme to avert an impending economic disaster due to the outbreak of COVID-19, with industry body CII suggesting direct cash transfer of Rs 5,000 into the accounts of all adults with an annual income of less than Rs 5 lakh per annum.
It said that for more vulnerable persons above 60, the cash transfers could be raised to Rs 10,000.
“This would be a temporary one-time measure to boost consumer demand,” the industry chamber said in an action note on COVID-19 and its impact, industry and economy submitted to the Prime Ministers Office (PMO).
Though an old concept, Helicopter Drop was widely used in the 2008-09 economic crisis in the US. It entails providing a direct financial support to the public which can kick-start economic activity.
The Confederation of Indian Industry (CII) has said that as COVID-19 is expected to weaken growth impulses by acting through the trade and financial channels, expeditious policy redressal measures - both on fiscal and monetary front would be required. It is here that a fiscal stimulus of around 1 per cent of GDP, amounting to Rs 2 lakh crore, would be required to put money in the hands of people through Aadhaar-based Direct Benefit Transfer.
With regard to money to support large cash transfer programme, Confederation of Indian Industry has suggested that savings from low oil prices could be channelised for additional spending required to keep the wheels of economy moving and preventing depression to seat in. (IANS)