I have a question.
The Indian economy was suffering from a lack of demand before COVID-19. To address this, government took several measures, some major ones like reduction in corporate taxes etc. In my understanding, the govt. was acting on the top portion of the economy.
Why didn't we give a stimulus package, which is limited to the lower part of the economy pyramid? This would bring some money in the hands of the people. This will increase demand, and keep the MSM businesses running. This way there would be bottom-to-top approach in boosting economy.
But instead, the interest rates are reduced, encouraging the people to not hold on to the money, but invest it.
Can someone please clarify?
Thanks.