On the Road to Recovery: The Role of Post-Lockdown Stimulus Package

Abstract

Indian economy witnessed a plummeted growth in past few years leading to recession. The entire economic activity all over the globe was disrupted due to the COVID-19 pandemic. To revive the economy out of recession, various monetary and fiscal stimulus measures were announced by the Government of India. The objective of this research was to assess the perception of various stakeholders with respect to the effects of these stimulus measures on reviving Indian economy. Based on the intensive discussion with academic experts and policymakers from corporates, five constructs of monetary and fiscal stimulus measures were developed. Web-based survey was conducted with 250 stakeholders from India. Confirmatory factor analysis technique was applied to confirm the constructs. The path analysis using structural equation modelling revealed that all five hypotheses, that is, monetary policy, labour and land law, taxation and subsidies, general business climates, and employee and consumer-related monetary and fiscal stimulus measures, positively and insignificantly affected economic recovery. This results showed a positive perception of stakeholders about the stimulus measures on reviving the Indian economy. However, the insignificant results suggested that unless these stimulus measures are implemented and monitored properly by the Government of India, they would not revive the Indian economy in near future.

Economic Recovery Program Post-Covid-19 at Modern Islamic Boarding Schools (Pesantren)

“…The multiplier effect caused by the Covid-19 pandemic has affected the development of Islamic economy in Indonesia, such as the halal product industry, the Islamic financial industry and the expansion of sharia businesses through pesantren business unit (Prusty, Anubha, & Gupta, 2021). Therefore, the management of the pesantren business unit is highly dependent on the existence of santri or voluntary social donations.…”

The Impact of the Stimulus Packages on the Economy during COVID-19 in Bangladesh: A Mixed-Method Approach

“…However, challenges in fund disbursement to those in need were noted. Another study in India supported the need for fiscal stimulus packages in SMEs during COVID-19 for business recovery (Gourinchas et al 2021;Prusty et al 2022).…”

“…Despite challenges during implementation, the package significantly improved the overall outcomes for recipients. A similar study in India showed mixed short-term results, with challenges related to decreased sales and laborers returning to villages (Prusty et al 2022). Meanwhile, Germany's fiscal stimulus package, analyzed using a dynamic new Keynesian multi-sector general equilibrium model, demonstrated significant short-run mitigation of output and consumption losses, reducing welfare costs for beneficiaries (Hinterlang et al 2021).…”

“…Similar to these, some studies were cross-sectional and used Likert scales to construct variables. Although they demonstrated a significant positive correlation between microfinance services and the self-sustainability of women, they did not explore the broader social and economic conditions of women entrepreneurs (Hameed et al 2022;Halimatussadiah et al 2020;Prusty et al 2022). A web-based survey involving 250 stakeholders from India, including academics, entrepreneurs, and industry experts, was conducted to validate constructs related to monetary and fiscal stimulus measures using confirmatory factor analysis.…”

“…9% in FY 2018-2019to 3.5% in FY 2019-2020, as shown in Table 1 (Finance Division 2023. This pandemic shock globally resulted in lower output and increased prices, affecting both domestic and cross-border businesses (Prusty et al 2022). Despite attempts to stimulate the economy through expansionary fiscal and monetary policy, which involved increased government spending and increased money supply, credit to the private sector declined and overall investment did not grow significantly.…”