Indian Economy After COVID 19 outbreak

Meaning of REPO Rate: Repo rate is the rate at which the Central Bank (RBI in case of India), lends money to the commercial banks in the case of fund shortfall. In the event of inflation, RBI increases the Repo Rate as a result of which Commercial Banks find it difficuilt to borrow fund from RBI, which further results in shortfall of fund with the Banks and ultimately to the public. Increased Repo rate arrests the flow of fund from banks to public and from public to market and this is how Inflation is encountered.   BRIEF ABOUT RATE CU T BY 40 BPS Mr. Shaktikanta, the Governer of RBI, on 22th May 2020 ,  has announced reduction in the repo rate under the liquidity adjustment facility by 40 bps to 4.0 per cent from 4.40 per cent earlier, with immediate effect. This means, RBI wants Commercial Banks to provide fund to public at reduced rate.  On 27 March 2020, the Reserve Bank of India (RBI) reduced the repo rate by 75 basis points (bps). The red...

Background "A special economic package is being announced to make India self-reliant," Modi said in his third address to the nation over COVID-19 pandemic. "This package, taken together with earlier announcements by the government during COVID crisis and decisions taken by RBI, is to the tune of Rs 20 lakh crore, which is equivalent to almost 10 per cent of India's GDP." Most economic activity in the country had come to a standstill after the government imposed a 21-day nationwide lockdown beginning March 25 to check the spread of coronavirus. The lockdown has since been extended twice through May 17, with some relaxations to allow the resumption of economic activity. The package, he said, will focus on land, labour, liquidity and laws. It will cater to various sections, including cottage industry, MSMEs, labourers, middle class, and industries. BRIEF STORY The blue-print of INR 20000000000000 economic package has been presented by Honorable FM of India ...

Restarting the Economy While a drastic shutdown of business has been a key part of tackling the COVID-19 pandemic, the economic fallout is spiraling, with almost  10 million people filing for unemployment  in the last two weeks of March and markets dropping precipitously. A key question now is how to restart the economy safely and efficiently when the time comes. Restarting the economy is especially important to prevent a prolonged recession that would take a severe toll on poor and vulnerable people. “We are going to have to restart the economy starting from a depression-level situation, But How? Role of NBFC & MSME India is a country where procuring a loan, is a process which is not just confined to the boundaries of a bank. Banks with all their corporate glamour and credit rating criteria may intimidate a common citizen of our country, which in most parts, still remains a ‘developing country’. Indians are known worldwide for their creativity when it comes to f...