Govt's key reforms fail to gain traction


Published On: Monday, October 5, 2020 | By:

Govt's key reforms fail to gain traction

Delay in appointing a new central bank committee to decide interest rates is just the latest of govt’s key economic reforms that are failing to gain traction during the nation’s worst crisis in decades. Three of its major policies -- the goods and services tax, a bankruptcy and insolvency law, and the Monetary Policy Committee -- have been mired in problems since the Covid-19 outbreak upended economic activity. The central govt has delayed payments it promised India’s 28 states as compensation under the new consumption tax regime, increasing tension between the two tiers of government. The bankruptcy law has been suspended, frustrating the loan recovery efforts of lenders already saddled with one of the world’s worst bad-loan problems. And on top of that, the government didn’t appoint members to the central bank’s MPC in time for its scheduled policy decision last week, delaying possible stimulus that the economy desperately needs.

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