PRINTING CURRENCY IS GOING TO BE THE WAY OUT TO REVIVE ECONOMIES POST COVID-19

 

PRINTING CURRENCY IS GOING TO BE THE WAY OUT
TO REVIVE ECONOMIES POST COVID-19

   It is expected that all kinds of Nations across the world will be compelled and will find the only way out to print currencies to revive their economies. Every Nation globally is announcing or has already announced without having a choice, huge amounts of stimulus packages to bring the derailed economies back to tracks after Covid-19 episode and measures like lock down to contain it at the cost of jeopardizing the economies. It would be futile to expect that such huge funding globally would in any way be possible to be met by IMF (International Monetary Fund) or World Bank or other such multilateral funding/development organizations by loan route as normally done when the Nations come under any crisis situation under normal circumstances in the world. The massive fund outlays announced can only be backed by printing lot of currency at every central bank (RBI, the Reserve Bank of India is the central bank in India). The modality of bond buying or myriad ways of financial operations that can adopted between the Central Banks and the Sovereign Governments, but printing of currency and a lot of it, will be the only way out. It will not be known to public and it is never disclosed in public but will happen. The efficiency of the Finance Ministry of the Government concerned or generally the skill of the Govt and the Central Bank handling it and channeling it appropriately to contain inflationary pressure in the economy will be the key for performance of the economy. Since it is expected that the economies will contract due to lack of demand and loss of consumption or uptake of Goods and Services ( meaning there would be deflation ), printing of currency to place more money in circulation to place purchasing power in the hands of people to hasten demand will not raise inflation that much as normally believed.   It is believed that India will have to print a lot of it through the RBI to find way out post Covid-19 and more over the call for “ Atma Nirbhar Bharat “ ( self reliant India ) will need a lot of it to be done. If Indian Economy contracts by 1% ( that can be said as -1% growth in demand ) can accommodate about Rs. 200000 Crores ( or Rs. 2000 billions ) printing and pumping of currency into the economy to neutralize the contraction in demand ( presuming with hastened purchasing power the demand would grow in positive direction). There are published reports that Indian economy may even contract in between 3-9% during the financial years 2020 and 2021.  My expectation is without any bias and based on facts of reality as exists in the world today, it is no prediction by astrology or black magic, it is the pure understanding of behaviourial economics and understanding of sovereign economic behaviours.


About the Author : Dr. Nimain Charan  Biswal is a B.Sc.(Agri. Science and Technology ). M.B.A. and Ph.D.( Management Area ) by qualifications and he has 34+years of work experience in both  industrial and development sectors in diversified fields of social importance. He has been educated at Orissa University of Agriculture and Technology (OUAT)-Bhubaneswar, Institute of Rural Management Anand (IRMA) and Gujarat University ( with Resource Support of IIM-Ahmedabad ). Dr.Biswal is further educated at IIM-Calcutta, XLRI-Jamshedpur, Apple Computer Industries and Spar Inc., USA. He has worked for reputed National and International Organisations in Senior/Top Management Capacities. He is a management  expert, a prominent professional of India and known Internationally as well. He lives at Mumbai in India.

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