The Centre will closely monitor COVID-19 infection data for six weeks to chart the path it needs to walk for economic intervention, rather than making announcements based on projections of the third wave of the pandemic, Principal Economic Advisor to the Finance Ministry, Sanjeev Sanyal said on June 24.
Sanyal made the statement amid criticism of the government for its alleged poor planning which led to hardship to people and the economy.
“We are dealing with uncertainty. The third wave may happen, but we do not know how it will unfold. We need to take some steps against the third wave as a policymaker, and we will carry monetary and fiscal interventions if required.”
“But we need to watch carefully the high-frequency data for six weeks and monitor the testing rather than prejudge how it will behave,” he said at an interactive session with the MCCI.
On the possible interventions in wake of the third wave's threat to the economy, the economist said, “Our response is partly contingent on how exactly things span out.”
Sanyal said that fresh interventions could be targeted at sectors based on actual situations rather than generalised ones.
“With the steps already taken on the demand side, some sectors are already red hot, but some sectors like tourism and hospitality are not. If generalised interventions are done, the demand and the growth will spurt but will have the problem of inflation,” he said.
Sanyal said that the government would like to respond quickly based on actual data instead of assumptions.
He said that planning and forecasting will work in case of vaccination, which is the only solution to get out of the “switch on and switch off (lockdowns)” mode and the nation does not want to go back to a “blunt” nationwide lockdown.
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