INDIAN GOVERNMENT TRYING HARD TO REVIVE ITS ECONOMY

Merely within a couple of months, COVID-19 pandemic has turned the world economy upside down. All economic and financial indicators point to one of the sharpest economic contractions in modern times which can be worse than the GREAT DEPRESSION. The economic impact of the 2019-2020 coronavirus pandemic in India is gradually getting more disruptive with each passing day. World Bank and other credit rating agencies have downgraded India’s growth for the fiscal year 2020-21 with the lowest figures India has seen in three decades since India’s economic liberalization in the 1990s. However, their mode of modelling the same is still not very agreeable and is deemed to be more speculative by many economists.  Within a month, unemployment rose from 6.7% in March to 25% in May. During the lockdown, an estimated 14 million people have lost employment. More than 45% of household across the nation have reported an income drop as compared to the previous year.

Suppression has its own cost. While the Covid-19 outbreak started with disruption in the supply side, it is having a huge toll on individual income and demand. Because of enforced lockdown shopkeepers were not able to open shops; employees cannot be at their respective workplace (office, site, stadium, malls, etc.). This crippled a large range of economic activities across industries ranging from health care, pharmaceutical, electronic goods to IT (information technology), grooming, retail, hospitality & tourism, catering, entertainment and real estate. Daily wage earners, young companies, SME’s, and small shopkeepers that were shut during the restrictions imposed are worst hit. As a result, the following symptoms are being reported –

• SHARP RISE IN UNEMPLOYMENT
• STRESS ON SUPPLY CHAINS
• DECREASE IN GOVERNMENT INCOME
• COLLAPSE OF THE HOSPITALITY INDUSTRY
• REDUCED CONSUMER ACTIVITY
• PLUNGE IN FUEL CONSUMPTION. RISE IN LPG SALES
• COMPANIES GOING BANKRUPT
• DAILY WAGE EARNERS- LABOR, STREET SIDE VENDORS THROWN INTO DESTITUTION

Government has been extensively intervening to prevent translation of nationwide lockdown into a depression. Some very hard choices lie ahead for the Finance Minister (FM)-LED COVID-19 Economic Response Task Force.  FM under the leadership of Prime Minister Narendra Modi has announced several waivers and relaxations- moratoriums, relief packages, etc. Few important relief measures by the Indian Governance-

• UP government decided to give a direct money transfer to Rs.1000 to all daily wage labourers and Punjab also announced Rs.3000 each for all construction workers in their state.
• BPL families provided with rations- rice, pulses, wheat, mustard oil, sugar-free of cost in many places.
• RBI Governor Shakti Kant Das announced moratorium- EMI’s being put on hold for three months and reducing Repo Rate.
• UP government to transfer Rs.611crore for workers under MNREGA scheme.
• 30% salary cut for one year announced for the President, Vice President, Prime Minister and Members of Parliament and Ministers which will be transferred into the Consolidated Fund of India.
• Since 15TH April, the government allowed for all agricultural and horticultural activities to remain fully functional and information technology companies can function with 33% staff.
• Government of India revised its FDI policy to protect the Indian companies from “OPPORTUNISTIC ACQUISITIONS” during this pandemic.

However, the much-needed fiscal package to salvage the economy has been announced by PM Modi on the eve of 12^th May, 2020.  PM Modi announced a package worth INR 20 lac crore which tantamount to 10% of India’s GDP has been set aside as an economic relief package. Details of the package will be announced by the Finance Minister in the coming days. This is to strengthen up the supply chain and manufacturing sector by bolstering the innovations in technology. He has emphasized upon the need to realize the importance of self-innovation, self- dependency and to develop an enterprising outlook even in this hard time. The need of the hour is to convert this crisis into an unbelievable opportunity.

We all are aware of big fancy showrooms, food outlets stationed in malls were all redundant during this crisis. Hence, to boost up the manufacture of self-indigenous products and services we must go LOCAL. PM has urged us to go “VOCAL FOR LOCAL”. Probably, an opportunity for Indians to replace China as the world’s manufacturing hub.

PM Modi has accepted the very fact that we might have to learn to live with this virus and resume our activities until and unless some permanent cure is discovered or invented for the disease. Novel Coronavirus is going to change our lives in ways we never thought was possible. Some major implications can be-

• Work from home will be the new norm
• IT technology to become an integral part of the business chain
• People will give more emphasis to cleanliness and personal hygiene
• Self-dependency and innovation to be new soft skills requirement
• Procrastination will find the last spot
• Cash burning to be eliminated at each stage of the company’s survival
• Respect for mother earth to be realized and valued for.