India faces economic as well as COVID-related health crisis both at home and abroad. Present is an unprecedented and challenging phase. India’s GDP has drastically declined. According to a report, it has turned negative in current fiscal, a situation never happened before.
A deep recession has set-in with dried up demand across most sectors except probably essentials and healthcare. Supply is constrained for most goods and services, a situation likely to last for a long period. Government has taken a proactive stand on managing such a crisis.
Within a short span, an economic stimulus package covering also the health sector has been put up, encompassing apart from liquidity injection, well studied structural economic reforms for practically all critical sectors—coal, power, airlines, banking, MSMEs, NBFCs and others. Quite a few long pending legal and procedural reforms have also been undertaken.
A new model of Indian economic development seems to be evolving that emphasizes “Self-Reliant Digital Economy’ ‘empowerment rather than entitlement’, ‘collaborative strong government, strong business & strong society’ and ‘enlightened nationalism in liberalized times’.
A major issue of concern pertains to migrants’ exodus from places of their work, which holds manifold economic repercussions. But India’s economic potential continues to remain high. A number of global leaders are of the view that India is the only country which stands tall to gain from manifold opportunities arising from disruption of major supply chains due to sudden onset of Covid-19.
This has been made possible with the Government’s timely facilitation of the trend of turning challenges into opportunities. For example, by way of further easing of doing businesses, enabling companies to become more competitive and creating conducive atmosphere for foreign companies to shift their established operations in China to India. However, implementation hindrances are many which prevent same spirit to percolate down to the ground level, which hopefully will get addressed. Finally, as no proper vaccine cure has been approved, the citizens will have to learn to live with COVID-19.
*Ms. Kiran Nanda, Corporate Economist and Sustainability Analyst contributed this note to MVIRDC World Trade Center Mumbai
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