Centre must loosen purse strings, measures announced by it are unlikely to prop up growth immediately

What is definitely missing from the policies announced so far is a direct stimulus in terms of financial outlays from the Centre. This is critical, as the problem is deep on the demand side.

The solution so far has been for the government to nudge the RBI to keep lowering interest rates. (Illustration by C R Sasikumar)

There is a sense of déjà vu with a difference, with the government going in for a series of announcements to reinvigorate the economy over the last couple of weeks. The first set of announcements came against the backdrop of mis-governance of the earlier regime. This time around, it is an acknowledgment that something is amiss in the economy with GDP growth for the first quarter of 2019-20 slipping to a six-year low of 5 per cent. While economists are debating whether the current slowdown is cyclical or structural, the fact is that jobs are not being created. Consumption is not picking up and companies are not investing like they used to. This has been the trend since demonetisation in 2016.