Should we expect optimism or pessimism?

The micro, small and medium enterprises (MSMEs) sector has "over 60 million functional units, employs around 110 million people and contributes a little less than 30% to the country's economic output and more than 40% to its exports". wrote Lalit Bhasin. During the coronavirus lockdown, struggling MSMEs "found e-commerce to be an effective, swift and low-cost option to reach customers". This proved to be a trap. "The mandatory 'country of origin' tag is their latest regulatory entanglement, after recently-implemented tax deduced at source (TDS)  and tax collected at source (TCS) requirements multiplied the complexity of their compliance management." The informal economy "may not come under direct taxes, as income here may be mostly under the taxation threshold", wrote Satya Mohanty. "Studies in Latin America show that a thriving under-ground economy could aid growth" because "60% of earnings from unaccounted-for-economy are used almost immediately in the official economy". However, this is totally different from black money. "Electoral bonds with no trails are effectively an invitation to a government-crony nexus and a recipe for further generation of black money." The government needs high tax collection "to boost public spending in a manner that puts money in people's hands, especially those who are more likely to spend rather than save it", wrote an editorial in the Mint. "In basic-input sectors like cement, steel and aluminium, clear signs have emerged of a revival in capital spending," wrote the Mint. Why, when "Consumer confidence, as measured by a RBI (Reserve Bank) survey, remains dismal," is unclear. "Estimates peg the total job loss for salaried individuals at 21 million between April and August of 2020," wrote Shayan Ghosh. "Initial data released by the central bank shows that more than half off all retail borrowers who had availed a loan had opted for a moratorium by the end of April." As the moratorium period ends, banks are using loan recovery agents to coerce customers to repay loans. "I foresee even suicides from this retail distress," said Jehangir Gai, a consumer activist. The RBI is helping the government by tolerating a high inflation because high prices means higher GST collection and higher wages result in higher income tax collection. High inflation results in a fall in the value of the currency which reduces value of government debt. "A repo rate of 4% when inflation is expected to stay above 6% means that negative real interest rates by design," wrote The Economic  Times. "Revising up inflation bands for the central bank will hurt the poor," former Deputy Governor of the RBI Viral Acharya said. "For consumers, the high excise duty and VAT, which make up 63% of petrol and 60% of diesel prices, makes the pinch harder due to their incremental increase after every hike in the base price." As transport costs rise so will prices of goods and services. High taxes, high prices, high individual and government debt. A tsunami maybe on the way.