India’s aid package threatens to fizzle out

Economists are disappointed with well-known announcements and doubt the economic stimulus for Asia’s third largest economy. The misery of the workers never ends.

Migrant workers wearing face masks wait on a road in Ahmedabad, India, to be transported to a train station to return to their hometowns.

Dhe second largest country in the world with almost 1.4 billion people is now extending its curfew once more until the end of May. Before that, the official number of corona infected people in India overtook that of its Asian rival China: India is heading for more than 100,000 cases by the middle of the week – the test rate on the subcontinent is negligibly low. However, the official death toll remains far behind the comparative figures in other countries.

India now wants to lift the lock step by step: In districts where there are only a few cases, more shops and schools are to open than in the heavily infested. These include, for example, the economic metropolis of Bombay (Mumbai), but also the state of Maharashtra, which is popular with investors. The Indian government put the country in an artificial coma on March 25. This began an unprecedented story of misery for millions of day laborers, who lost their vital income overnight.

The Indian government has now also relaxed its use of the previously prescribed app for tracking movements on mobile phones: If it had previously stipulated that company bosses, among other things, were responsible for their workers using the app, it now only says “they should ask about it strive “. For weeks there had been criticism of the app with its data that is not very well protected compared to Western countries.

The anger of the migrant workers that the government paid little attention to their fate for weeks continues to grow. Hundreds of millions of people without savings no longer have an income. Many have made the hundreds of kilometers long way home in their villages – a trek without having a perspective at the destination. Hundreds of thousands wander along streets and highways because there was no means of transport for weeks. Newspapers report of hauliers who steal the last rupees from the desperate workers in order to drive them a little towards their homeland.

Sharp increase in budget deficit expected

A few hundred trains have now been deployed, but for many they are too late. In western Gujarat, more than 1,500 migrant workers tried the riot, attacked the police with stones and wrecked cars because they feared their migration would be blocked. 23 migrant workers were killed on Saturday after a truck accident occurred. In the first week of May, eight returnees were run over by a train and died.

Although Finance Minister Nirmala Sitharaman explained in detail the state’s corona aid, which amounted to the equivalent of 245 billion euros, over four days until Saturday, disappointment is spreading in the economy: a large number of the reforms, such as the opening of the arms sector, are long overdue of the bundled package has long been known and it remains completely unclear when they will be implemented – the whole thing smells above all of one of the promises and advertising campaigns customary under Prime Minister Narendra Modi.

There is also criticism that India is building 50 coal-fired power plants despite the climate crisis and plans to use 600 million euros for the transport of coal alone. The business newspaper Mint comments: “The measures failed to convince economists. They said the lack of robust momentum threatens to fail to stimulate the economy. “

At the same time, India’s deficit, which had already broken the limit set by Modi before Corona, is now likely to skyrocket from the expected 3.5 to at least 5.5 percent of economic output. The former chief statistician of India, Pronab Sen, expects the third largest economy in Asia to shrink by 9 percent for this fiscal year (March 31) – a figure that currently sounds unbelievable: Modi himself repeatedly spoke of a double-digit growth rate, the analysts of most banks expect slight growth despite Corona. Exports in April are 60 percent below the previous year’s figure, and in May they are likely to have fallen even further.