An additional direct fiscal stimulus of 3-5 per cent of the gross domestic product (GDP) might be required to offset the loss of working hours in the country following the outbreak of the Covid-19 pandemic, State Bank of India (SBI) said in its research report on Monday.
Citing the recent estimates of loss of working hours by the International Labour Organization (ILO), SBI said “the maximum hours lost was in Q1 2021, when the lockdown was severest”.
“The total number of hours lost for all these periods comes to 5948 crore hours … the government might thus need to give a further direct fiscal stimulus of the size of 3-5% of GDP to offset the gap between the equivalent fiscal stimulus and the labour market disruption through loss of working hours,” the report by SBI said.
The Indian economy has picked up momentum in October, the report said, citing indicators of vehicle sales, Apple mobility, RTO transactions, manufacturing PMI, GST e-way bills, petrol consumption, vehicle sales, SBI index, food arrival and prices.
“The numbers have become positive when compared to the pre-Covid levels, and they have also crossed the peak reached in last 1 year for some including manufacturing index, GST e-way bills, vehicle sales (from the positive level reached 2 years ago). However, RTO revenue collection,power consumption, freight traffic revenue, food arrivals, petrol and diesel consumption are all still below the pre-Covid peak level,” the report added.
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