Next stimulus in one go rather than piecemeal, says DEA Secretary Tarun Bajaj

In his first exclusive media chat after assuming office in May this year, Department of Economic Affairs Secretary Tarun Bajaj spoke about the likely contours of the next economic stimulus, in an interaction with Shereen Bhan.

First up, Bajaj said, "Actually what has happened is we have a received a number of suggestions from associations, all kinds of associations, and we are having a look and we want to do it in one go rather than doing it in small little instalments, that is the only issue… timing wise whether we will do it pre Diwali or post Diwali but I think that again is not so much of a significance as is the policy issue for us, whether it happens on 13th or happens on 15th."

The government has attracted flak from most quarters for having not announced a big enough fiscal stimulus package to revive the economy. However, a section of economists have said that it made sense to spread out the stimulus given that the situation was still unfolding. A second wave of COVID-19 has hit many parts of the world, and the fall out is likely to be felt by the Indian economy through the trade route.

"I may share with you that we have been receiving a lot of demands as to what we should do with the remaining Rs 1 lakh crore of guarantee space that still remains in the sector that, I won't call it MSME, but to the industry that was provided funds," he said.

Bajaj said the government has received requests that the lifeline be extended to companies that have still not taken loans or or small businesses that have still not taken loan from the banks.

"So we are looking at what is feasible and what is doable….we are committed to the fact that we would like to fully utilise this Rs 3 lakh crore window of guarantee and to provide funds to the industry and get them back on track," he said.

"There was some money that was given by the Finance Minister in the last stimulus that was announced a few days ago, and here in the finance ministry we have actually spelt out very clearly to the ministries that they can actually spend some money on the ground, and actually spend money means the brick mortar happens on the ground, we will be ready to provide further money for that purpose and there are some ministries which have come with that request and will actually be looking at that, even providing some extra money in this very difficult year," he said.

"We are still examining the requests , we have got requests from MoHUA, some other ministries as well, defence production for instance domestic defence production, and very soon we will be able to tell you what we have done," he said.