Chief Economic Adviser K V Subramanian on Wednesday said that more fiscal measures would be announced by the government to boost demand once coronavirus-related uncertainty wanes. Speaking at a webinar organised by FICCI, Subramanian said that the uncertainty is likely to wane significantly once COVID-19 vaccine is found.
"The government is willing to do what is necessary in terms of government consumption but timing of this is extremely important... Till we have uncertainty, even if people have money in their pockets, they may decide to keep it in their bank," Subramanian added.
Subramanian said that there has been a rise in deposits by Rs 20,000 crore in Pradhan Mantri Jan Dhan Yojana. People are saving rather than spending due to uncertainty, he added.
"The right point would be if vaccines come and thereby uncertainty goes down. I think the time would be very right for the fiscal push which will really generate demand even for discretionary items," he noted.
Meanwhile, Finance Minister Nirmala Sitharaman on Tuesday said that that government is open to taking further measures in the coming days to boost recovery of the economy. "All options are open... interventions will happen in future," Sitharaman said, assuring the industry that the government will not shy away from taking more steps to ensure early revival of the economy. The minister further said the "agriculture sector is driving the growth".
To deal with the coronavirus crisis, the government in May had announced one of the world's biggest stimulus packages worth Rs 20.97 lakh crore.