Waiting for reforms: On the economic stimuli

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Waiting for reforms: On the economic stimuli

The stimulus incentives hold promise, but structural reforms are nowhere on the horizon
People who have been yearning for major(प्रमुख ) economic(आर्थिक ) reforms(सुधार) from the Narendra Modi government, it seems(दिखाई पड़ना/लगना), will have to wait to have their dreams come true. Finance Minister Nirmala Sitharaman on Saturday presented the third round of stimulus(प्रोत्साहन/उत्तेजना) measures(उपाय ) to resuscitate(पुनर्जीवित ) the struggling(संघर्षशील ) economy, but once again these have largely failed to live up to the initial(प्रारंभिक ) hype(प्रचार ) around(आसपास ) them. The previous two rounds of the stimulus plan, presented at press conferences held by the Minister over the last few weeks, focused primarily(मुख्यत:) on reviving(पुनर्जीवित/प्रसन्न करना) the automobile sector, boosting the confidence of foreign(विदेशी ) investors(निवेशक) who were spooked(प्रभावित/असुविधा) by the Budget announcements(घोषणाओं ) in July, and improving the health of dangerously fragile(नाजुक) state-owned banks by doing everything short of privatising(निजीकरण ) them. This time around the focus has been on helping out the underperforming export and real estate sectors through piecemeal(क्रम से/एक एक अंश) fiscal(वित्तीय/राजस्व) reforms. Among other things, Ms. Sitharaman announced a new tax refund scheme and greater priority(प्राथमिकता) sector lending for the export sector to incentivise (बढ़ावा देना)exports(निर्यात ). It is expected that the new tax breaks to the exports sector will cause(वजह) a dent of up to ₹50,000 crore to the government’s revenue(राजस्व/आय). Further, external commercial borrowing(उधार ) norms have been eased to make it easier for Indian real estate companies to tap funds from abroad(विदेश में, ), and funds worth ₹10,000 crore have also been allocated to aid the completion(पूरी/समापन) of affordable(सस्ती) housing projects. With lack of demand and major supply-side bottlenecks being the primary issues facing exports and real estate, it is doubtful whether the present measures will be enough to revive these flailing sectors.

Overall, cutting across all three stimulus rounds announced till date, the government has been relying(भरोसा करना) almost entirely(पूरी तरह) on providing(प्रदान करने) fiscal relief, in the form of tax cuts coupled with a tiny(छोटी ) amount of government spending, to wade through what seems like a structural crisis(संकट) in the economy. The hope seems to be that these measures combined(संयुक्त) with a looser monetary policy stance adopted(अपनाई गई) by the RBI will boost(वृद्धि ) spending(खर्च ) and revive(पुनर्जीवित ) growth(विकास ). This is, however, a far cry from what many expected(उम्मीद ) from a government that promised(वादा करने वाली) radical(कट्टरपंथी /पूर्ण/उग्र) structural(संरचनात्मक ) reforms(संरचनात्मक ) when it rose to power in 2014. Without enacting(अधिनियमित ) any major supply-side reforms like land and labour reforms that can raise(ऊपर उठाना) potential(संभावित ) growth, it is also hard to see how greater spending can raise growth for very long. The government may believe that the present slowdown, marked by five consecutive(लगातार ) quarters(तिमाहियों) of dropping growth, is merely(केवल ) a cyclical(चक्रीय) one. But given the size of its victory(जीत) in two consecutive elections, the government should aim higher by trying to push through long-pending structural reforms that can raise India’s growth trajectory(कक्षा/प्रक्षेपवक्र) to the next level.

Important Vocabulary

1. Affordable(सस्ती)
Synonyms: cheap, economical, fair, low-cost, modest
Antonyms: costly, expensive, pricey, unaffordable, exorbitant

2. Adopted(अपनाई गई)
Synonyms: accept, approve, embrace, endorse, follow
Antonyms: deny, disagree, disallow, disapprove, discard

3. Boost(वृद्धि
Synonyms: advance, encourage, promote, push, support
Antonyms: discourage, dissuade, halt, stop, condemn

4. Crisis(संकट)
Synonyms: catastrophe, change, confrontation, crunch, deadlock
Antonyms: agreement, benefit, blessing, breakthrough, calm

5. Hype(प्रचार
Synonyms: advertising, buildup, plugging, promotion
Antonyms: secrecy

6. Fragile(नाजुक)
Synonyms: delicate, feeble, frail, weak, brittle
Antonyms: able, firm, healthy, strong, durable

7. Initial(प्रारंभिक
Synonyms: basic, introductory, original, antecedent, commencing
Antonyms: following, last, subordinate, unimportant, closing

8.Incentive (बढ़ावा देना)
Synonyms: encouragement, enticement, impetus, motivation, reason, stimulus
Antonyms: discouragement, hindrance, deterrent, dislike, prevention

9. Measures(उपाय )
Synonyms: part, quota, allotment, allowance., amount
Antonyms: extreme, unimportant, whole, ignorance, inaction

10.Resuscitate(पुनर्जीवित
Synonyms: energize, invigorate, rejuvenate, restore, resurrect

11. Reforms(सुधार)
Synonyms: amend, improve, rebuild, rehabilitate, remake
Antonyms: break, damage, destroy, harm, hurt

12. Radical(कट्टरपंथी /पूर्ण/उग्र)
Synonyms: profound, basal, bottom, cardinal, constitutional
Antonyms: inessential, minor, secondary, unimportant, unnatural

13. Relying(भरोसा करना
Synonyms: await, bank, bet, build, calculate
Antonyms: disbelieve, disregard,. ignore, keep, straighten

14. Reviving(पुनर्जीवित/प्रसन्न करना
Synonyms: arouse, encourage, energize, invigorate, overcome
Antonyms: bore, break, damage, depress, destroy

15. Struggling(संघर्षशील )
Synonyms: cope, seek, strive, tackle, toil
Antonyms: forget, idle, neglect, be lazy, ignore

16. Tiny(छोटी
Synonyms: insignificant, microscopic, miniature, minuscule, puny
Antonyms: big, giant, huge, important, large.

 

Credit To The Hindu News Paper

People who have been yearning for major economic reforms from the Narendra Modi government, it seems, will have to wait to have their dreams come true. Finance Minister Nirmala Sitharaman on Saturday presented the third round of stimulus measures to resuscitate the struggling economy, but once again these have largely failed to live up to the initial hype around them. The previous two rounds of the stimulus plan, presented at press conferences held by the Minister over the last few weeks, focused primarily on reviving the automobile sector, boosting the confidence of foreign investors who were spooked by the Budget announcements in July, and improving the health of dangerously fragile state-owned banks by doing everything short of privatising them. This time around the focus has been on helping out the underperforming export and real estate sectors through piecemeal fiscal reforms. Among other things, Ms. Sitharaman announced a new tax refund scheme and greater priority sector lending for the export sector to incentivise exports. It is expected that the new tax breaks to the exports sector will cause a dent of up to ₹50,000 crore to the government’s revenue. Further, external commercial borrowing norms have been eased to make it easier for Indian real estate companies to tap funds from abroad, and funds worth ₹10,000 crore have also been allocated to aid the completion of affordable housing projects. With lack of demand and major supply-side bottlenecks being the primary issues facing exports and real estate, it is doubtful whether the present measures will be enough to revive these flailing sectors.

Overall, cutting across all three stimulus rounds announced till date, the government has been relying almost entirely on providing fiscal relief, in the form of tax cuts coupled with a tiny amount of government spending, to wade through what seems like a structural crisis in the economy. The hope seems to be that these measures combined with a looser monetary policy stance adopted by the RBI will boost spending and revive growth. This is, however, a far cry from what many expected from a government that promised radical structural reforms when it rose to power in 2014. Without enacting any major supply-side reforms like land and labour reforms that can raise potential growth, it is also hard to see how greater spending can raise growth for very long. The government may believe that the present slowdown, marked by five consecutive quarters of dropping growth, is merely a cyclical one. But given the size of its victory in two consecutive elections, the government should aim higher by trying to push through long-pending structural reforms that can raise India’s growth trajectory to the next level.


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