Active Oppn important in parliamentary democracy: Modi

Feb 28: The best economic tonic for the coronavirus shock is to contain its spread and worry about stimulus later, said Raghuram Rajan, former head of the Reserve Bank of India.

There’s little central banks can do, and while more government spending would help, the priority should be on convincing companies and households that the virus is under control, he said.

“People want to have a sense that there is a limit to the spread of this virus perhaps because of containment measures or because there is hope that some kind of viral solution can be found,” Rajan told Bloomberg Television’s Haidi Stroud Watts and Shery Ahn.

“At this point I would say the best thing that governments can do is to really fight the epidemic rather than worry about stimulus measures that comes later,” said Rajan, who is currently a professor at the Chicago Booth School of Business.

The spread of coronavirus is pushing the world economy toward its worst performance since the financial crisis more than a decade ago.

Bank of America Corp. economists warned clients Thursday that they now expect 2.8% global growth this year, the weakest since 2009.

“We have moved from extreme confidence in markets to extreme panic, all in the space of one week,” said Rajan, who previously was chief economist at the International Monetary Fund.

The virus outbreak will force companies to rethink supply chains and overseas production facilities, he said.

“I think we will see a lot of rethinking on this, coming on the back of the trade disruption, now we have this,” Rajan said. “Globalization in production is going to be hit quite badly.”

New Delhi, Apr 24: Congress leader Rahul Gandhi has termed the government decision to freeze Dearness Allowance of Central government employees for a year as "insensitive and inhuman."

The former Congress President in a tweet said: "Lakhs and crores are being spent on the Bullet Train and New Delhi's Central Vista which should have been suspended, but the government has deducted DA of Central government employees and pensioners... It is insensitive and inhuman."

"The tragic part is that by deducting this amount from January 1, 2020 up to 30th June, 2021 for a period of 1.5 years, the government of India proceeds to deduct almost Rs 38 thousand crore from the income of these middle class government employees and pensioners, who rely completely on the pay and pensions that they receive," said Randeep Surjewala, chief spokesperson of Congress.

There are about 50 lakh such serving government employees and about 62 lakh pensioners.

"Even more tragic and objectionable is the fact that the government of India has not even spared our armed forces. The government has deducted Rs 11 thousand crore of the 15 lakh serving armed forces personnel and nearly 26 lakh military pensioners. What is their fault? They are serving the nation in times of all types of crises," said Surjewala.

The Congress alleged that the government did not spare the savings scheme.

Instead of curbing the wasteful expenditure, the government has been constantly hitting at the income of government employees and the middle class, it added.