NEW DELHI: The government has a whole toolkit ready to deal with disruptions caused by the coronavirus, says Principal Economic Advisor Sanjeev Sanyal.In an interaction with ET NOW, Sanyal said the coronavirus outbreak needs more than a mere monetary response.
He also added that there was a scope for reducing interest rates in the next few months on hopes of inflation falling by around 100 basis points in the next two readings.A total of 28 Covid-19 cases have been detected in India so far.
Among them, one person was from Delhi, six of his relatives in Agra, 16 Italians and their Indian driver, one in Telangana and the three earlier cases in Kerala.When global supply chains and demand is under some threat, then a monetary condition is not a sufficient response, but part of an overall response.
The government has been taking into account this supply chain disruptions and has been watching them very closely, Sanyal said, adding that the government has a fair idea of the stock situation in various sectors, including pharmaceuticals and automobiles.Commenting on the supply chain disruption, he added that the supply side issue cannot be dealt with as a macro response.You can do a macro response like easing monetary policy but ultimately the supply chain part of it requires other tools.
There you have to use a more micro-based system.
You have to literally go item by item where we are importing from China or any other country that has seen disruptions because of this, then item by item have to have a feel from the industry what is the stock we have; like for example, of APIs.
So there are specific items that we will run out of much more quickly, he added.