May , 2020
Challenge to make or mar India
19:39 pm

Buroshiva Dasgupta

We are now in the third stage of the lockdown. Yet the curve of virus attack has not flattened. People locked at home are getting restless. Even entertainment cannot keep them engaged any longer. India’s television viewing, which had jumped 40% in the 5th week of lockdown, has dropped to 31% in the 6th week and the use of smartphones has grown by 9 % in week six, against 12 % in week three. (BARC & Nielson report). It could be depression; or simply desire to go back to work.Unemployment has jumped several folds and according to CMIE the number could have crossed one-fifth of the total workforce. The payrolls are a fixed cost irrespective of the revenue earnings; and the situation, because of standstill economy, has already become unsustainable. The industry is urging the government to allow the wheels of factories to run again.  India’s core sector, consisting of eight infrastructure industries, according government’s own industry ministry figures, has shrunk by 6.5 % in March. Except coal which grew  by  4% all else have dipped –  crude oil by 5.5%, natural gas by 15.2%, refinery products by 0.5%, fertilizers by 11.9%, steel by 13%, cement by 24.7%  and electricity by 7.2%.Everyone is looking forward to a government stimulus which the industry calculates to be just 0.8% of the GDP so far. Comparing the stimulus announced by developed countries like the US and Japan, there are various suggestions. The report of the taskforce, headed by the government’s own economic affairs secretary, and  which was tabled just a day before the prime minister held a high powered meeting to push forward economic reforms, suggested a Rs 111 trillion investment  in infrastructure  in the next five years.  The task force had been formed when the prime minister had announced the plan of a $ 5 trillion Indian economy, which in the present context seems a distant dream.Everyone, including Ratan Tata, is suggesting to reconstruct demand to push through this crisis. A strong stimulus (Rakesh Mohan, a former Deputy Governor of RBI and Economic Adviser to GOI suggests 5% of GDP) could be one method of increasing the demand. But with this high rate of unemployment on one hand and on the other, all those employed facing the impending prospects of pay-cuts, who will be the buyers to push the demand up?But let us not lose hope. The Facebook-Reliance tie up could be a game-changer. And the tie-up has happened during the lockdown. Data is positioned to become the new ‘oil’ of the world. Japan has started pulling out of China. And so is the US planning to do. The crisis should not dampen our spirits. This could be a turning point for our growth, if handled properly. China will not remain the ‘factory’ of the world anymore. We have a prospect there. “Make in India” could be an answer. In agriculture we have learned to produce more; but not how to store the grains nor how to distribute. If we can avoid   starvation – which could be a reality – we will learn both: storage and distribution. Finally, Covid 19 has exposed our pitiable health infrastructure. We have to first live to enjoy our livelihood.  Our expectation from the government has soared. Covid 19 has, grudgingly or otherwise, even brought the opposition   to cooperate.  Will the government take the challenge?   We can now make or mar India.      

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