Lock Down – Helicopter Money
The very word Helicopter mney means that it need not have any designated back up or secured assets to bring in the above money as per the governmental requirements. This money has to be brought in on emergency need and requirements only. Do you mean to say that this precarious period of lock down has brought that necessity? This can be called easy money and bring in the economic status of a country to stabilize and run in the necessary operations. It can also be construed that the money is donated to the people.
The whole world has become to a stumbling block on account of this treacherous Corona virus and every country is suffering economically and their GDP and financial structure has been shattered in all ways. India by its locked down till May 3rd 2020 is facing the acute shortage of currency in the hands of the public and their necessary needs are also is not filled up and lot of people are finding very difficult to meet both ends. Almost all the industrial clusters have stopped and stumbling to revive, the small and medium range of industries are out of this avenues and facing a dangerous hit and that is what is the statement of economist and analysts today. What is the course after this Corona end game? This is a million dollar question too. To circumvent this crisis there is only one hope is this helicopter money has to be introduced necessarily in India too. When all other countries are into this action why not this be done in India too. This action has to be taken up by the Government with the permission and connivance of Reserve Bank of India.
What is this Helicopter Money? This was introduced by Milton Friedman in the year 1969. This means wherever and whichever country is in dire economic crisis to safeguard this the money can be introduced to the citizens freely and it is just like throwing the required needs to all those who needs this from the helicopter to save the souls waiting in the earth and wanting the same. That means it shall be remitted in the bank accounts properly distributing.
When this format is introduced means the respective governments of any country need not secure proper assets and securities for printing new currencies and safe guard the interest. When the crisis of such altitude has come means, the Reserve Bank can print new notes and circulate them among st people. This would enable the people to have money for their working capital and other needs. Every country is contemplating to do this exercise because of this Corona situation.
USA in 2008 introduced this scheme to solve the economic crisis. All the houses in America were given no tax regime. Now that, the same government has allocated 10% of the GDP to the Corona crisis. This will enable them to come out of this crisis. This has been shared with Big Industrial establishments and small and very small industries to come up in their operations promoting their ill effects. If the same has been used to the employees rental and salaries means this need not be repaid to the government.
In European countries the citizens allowed loans on negative interest and the residual incomes were remitted in the banks.
In Hong Kong to circumvent the Corona crisis they have decided to introduce helicopter money and those who are 18 years of age 10000 dollars to be given, this was decided in their budget in February.
In Germany all self-employed, small industrialists, shop owners to take care of their losses because of the present crisis each one was given 5000 Euros and so far the government has said more than 2 lakh people have been benefited out of this scheme.
In France more than 6 lakh people have been benefited of having served 1200 dollars for each and every one for self-employed and small industrial owners.
Likewise all these countries have been exercising the benefits of Helicopter Money and printing currencies and helping the needy. As for India is concerned we are becoming every day from bad to worse conditions and all sectors of people are suffering out of this contingency. Most of the people have lost their jobs because of the curfew. The consumer’s benefits, manufacturer’s belief and everyone are looking to the worst scenario. For the laborers alone the government has announced 1.76 lakhs crores ad self-employed and small and very small industrialists and shop owners, no constructive scheme is there in the offing. Indian government has not even allocated even 1% in their GDP for the small timers benefit.
There are merits and demerits of introducing the Helicopter money. The Analysts say that there would inflow of money among st the people and their purchasing power would increase. This augments manufacturing activities too and also employment opportunities will also grow.
The demerits are some sectors will not be interested in spending this money, hence wanted to save and this would lead to economic inflation easily.
But in today’s status there is no available cash with India and the employment opportunities will be diminishing and at same time unemployment will play a dominant role and increase the burden of the government considerably. The situation is going to be still worse once the lock down is released. The burden on the government would be more and hence to prevent all the ordeals our government can safely decide to infuse the Helicopter money to ease the situation for the time being.
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