As we move STEP BY STEP towards reopening our economy, the gigantic challenge for the Government is how to mobilize resources to combat COVID-19 while also bringing the economy back to life IN A REAL SENSE.
1. Deficit-financing can be an option. But, it is a DOUBLE-EDGED SWORD. Before resorting to it, the time-frame must be kept in mind as it is an extreme cure for a state of depression.
2. Secondly, allocation of money under different heads may be transferred to the emergency pool. But the long-term solution lies in TACTFULLY playing the fiscal tools.
3. On the indirect tax side, the Government has VERY LIMITED CHOICE. The GST canvas is not to be touched, as very soon, the government may have to grant GST holiday for certain sectors for their quick revival.
Apart from recommendations to bring back wealth tax and inheritance tax from the burial ground, deduction u/s 37 calls for consideration on the CSR expenditure to motivate business enterprises undertaking COVID-19 relief works.