The government should adopt a social security plan to provide cover to 'laid off' people in the country in this economic downturn, said S L Rao, economist and chairman of Institute for Social and Economic Change (ISEC).
Speaking at the sidelines of an interactive session organised by Bharat Chamber of Commerce (BCC), Rao said, "The government should adopt measures to provide for people laid off, either as a grant or a loan, through a social security system." This would assist in providing security to families. Rao suggested building assets in agriculture to help the agricultural sector and in turn boost the economy.
Even with interest rates coming down, banks had not started lending in the current scenario. The government should provide greater reassurance to the banking sector in case of default, he advised. Rao said the overall economy including small and medium enterprises, real estate and the retail sector, were hit by the slowdown.
He warned there would not be significant growth in the next two years. A M Chakrabarty, chief secretary of the government of West Bengal, stated that apart from fiscal measures adopted by the government it was essential to discuss ways to tackle the present scenario and plan more steps to aid small businesses. "Some of our current leaders and economists have added to the confusion with projections whether middle of 2009 will be better or not. Without trying to forecast events, we have to see what can be done at present,” said Chakrabarty.