Ideas to revive economy post covid-19

Here are some ideas I could think of, to improve economy after the lockdown is lifted.

1. Retire senior people early
People above 50 face high risk of corona virus infection. Given the current risk of exposure, as well as job loss, may be it is a good idea to give them an option to retire early. May be those aged above 57-58 years can be retired mandatory while those in 50-57 years bracket can be given optional VRS. Yes, this will hamper income of such people but in the larger interest of economy will yield following benefits:
1. Keeps the senior age group safe from corona virus
2. Opens up some job for younger folks.

Pension will ensure minimum income to keep going. Those who retired early can pursue other hobbies they always wanted to while also offer their expertise as consultants on need basis. May be some exceptions could be made for those who can work from home for 4-5 days a week etc.

2. Reduce tax on luxury goods
When you buy certain luxury goods like expensive cars, the tax component is insane. Almost half the money you pay is for some or other kind of tax. If the government can relax high tax on luxury items for a short period- say 3 to 6 months, those sitting with lots of cash will go out and buy stuff they always wanted to. This high value purchase will induce money into economy- shop owners can pay rent, salaries, vendors etc and this money keeps rolling.

3. Reduce stamp duty on house registration
Real Estate has been badly hit even before Corona Virus. High prices, excess supply and weak market sentiment meant people aren't buying homes like earlier. For a short period if state governments can significantly reduce stamp duty, real estate developers can be convinced to give maximum discount possible, then those who have steady jobs and were deliberating buying a home will come forward.  30 to 50 lakhs per apartment into 1000s of buyers is lots of money induced into economy.

This will help developers offload inventory, pay salaries, clear bank loans, resume construction of newer projects and so on. All these spending will help rebound crashing economy.

4. Dropping fuel prices
Crude price is now almost negative- oil extracting countries would give crude for free or even pay for taking their fuel. But Govt of India is hell bent on keeping excise duty very high. May be it is time to temporarily lower excise duty, say for 3 months and make petrol and diesel cheaper by 25-30 Rs a litre.
  • This will encourage people to go on more road trips- more spending on toll, hotels, restaurants, tourist attractions
  • Cost of transportation goes down- end products can be sold cheaper- more sales
  • Transport companies can recover their losses quicker
Do you think these would work? Share your thoughts.

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