20 Lakh Crore Package – COVID Relief Funds

I hear the chants of ‘giving free money‘ yet many fail to realize that this is a difficult thing to do in a country like India. Compare this to the US where everyone got $1200 by the government.

The reason it works in the US is because nearly 90% of the population pays taxes and has bank accounts where tax returns get direct deposited. So you literally can look up the IRS (Internal Revenue Service) database where people file taxes and get all the info including addresses of each tax paying individual in the US. Hence sending out money which is either by direct deposit in the account or via check sent to the address on your last tax return isn’t as difficult.

Another major difference is the US has around 300 million while India has more than 1.2 Billion people. US’s bailout package is in Trillions of dollars whereas India’s is around 300 Billion dollars. Do the math yourself and you’ll see how much individuals/small business gets.

Also remember the goal isn’t to give free money. The goal is to give free money ‘quickly’ so they don’t feel the pinch and the economy doesn’t stall. Getting the money 6 months down the road means jack shit for people struggling NOW. In the current Indian system, half the folks don’t pay taxes and many don’t even have a bank account. Giving free money has a huge liability and fraud implications so unless you have a system robust enough to verify each transaction, it is difficult to disperse money.

The other way you can help the individuals is by interest free loan programs for small businesses or even waiving off loans if they keep their employees employed like the US did albeit the process was a hodgepodge mess. For individuals, you can distribute food and wave off government controlled services like utility/gas. You can also pass a rule so landlords cannot throw someone out if they’re affected. India has a history of horrible protection of tenants.

I’m no economist but I hear people here go on a bashing spree without any solution.

Saying ‘give free money’ isn’t a silver bullet. Also there is no ‘free money’. Someone (you me and everyone) will have to foot the bill. So really hate the term ‘free’.

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