The announcements made by Finance Minister Nirmala Sitharaman on Thursday had nothing to do with the industry or corporates, but for the poor and marginalised sections of society. These are welcome and highly commendable proposals. They were needed since the economically weaker section (EWS) is vulnerable and would surely be worried about the prevailing economic condition.
I think, the next set of announcements by the government will be for the industries. The government may not have the fiscal muscle to dole out more sops but they have to do it by letting go of the fiscal deficit target. At times like these, even if the fiscal deficit increases, no one will question it. On the contrary, they will be welcome. It is imperative that the government brings the economy back on track.
The next big issue that is expected to come up is equated monthly installment (EMI) and interest holiday. If people are not earning, how will they pay? It is to be seen whether there is interest holiday or EMI holiday doled out as these are the some of the major concerns for many individuals as well as corporates. Then come sector-wise sops for travel, tourism, airlines, and airports that have been badly affected due to the 21-day shutdown in the wake of Coronavirus (Covid-19) outbreak.
Markets have tanked sharply from their recent peak levels and hit the lower circuit twice in a time span of 10 days. However, they have been on a recovery mode since the last two sessions. The market depth is very low. Stocks have risen on the expectations of sops. However, once you see the uptick, there aren’t many sellers around as most of them have already sold-off. That said, it doesn't mean that the market has bottomed out. Unless we see the Covid-19 cases in India as well as on the global front petering out, nothing could be said about the road ahead for the markets with a firm conviction. If there is a surge in the virus cases, we will be back to square one and the markets will be on a downtrend again. So, these 21 days are very crucial for all of us and we have to take the lockdown very seriously.
Ambareesh Baliga is an independent market expert. Views expressed are his own.
(As told to Swati Verma)