Context: Even as many countries are stumbling, India has seized control of its destiny, is recovering, and making bold plans.

Background:

• The Covid-19 pandemic began spreading around the world just a few months ago.
• Yet, it has plunged the global economy into its deepest economic contraction since the Great Depression of the 1930s.
• Trillions of dollars of economic output have been wiped out, most countries will take years to return to pre-corona virus levels, and billions of people are confronting a shrunken future.

Calibrated measures

• India has avoided this fate. The government of Prime Minister Narendra Modi has undertaken a series of decisive, calibrated actions, which include implementing a rapid lockdown to save lives; providing abundant relief to protect livelihoods; and, simultaneously positioning the economy for strong revival through the ‘Atmanirbhar Bharat’ policy package.
• The national lockdown dramatically dampened the disease’s exponential growth rate and gave the country time to prepare.
• Soon after the lockdown was announced, the Prime Minister announced the Pradhan Mantri Garib Kalyan Yojana — a massive relief package for the needy. Through this programme, around 80 crores fellow citizens are being provided rations through the Public Distribution System.

 Results

• The rural economy, which supports 60-70% of India’s population and accounts for 46% of GDP, is surging.
• The excellent Rabi harvest has resulted in over ₹75,000 crores in farmer payments by the government. Almost 10 crores farmers have received ₹40,000 crores as income support through the PM Kisan Samman Nidhi.
• Over 4 crores households are benefiting from the expanded Mahatma Gandhi Employment Guarantee Act scheme. Thus, the rural economy has received over ₹2 lakh crores of cash directly into beneficiary accounts just from the Central government. State governments have run their own relief programmes as well.
• These massive cash payments have driven rural confidence, with consumer goods, motorcycle, and tractor purchases at or above pre-pandemic levels now.

RBI and policy actions

• Micro, Small and Medium Enterprises (MSMEs) and large corporates have also been provided substantial relief through coordinated action between the Reserve Bank of India (RBI) and the government.
• The RBI has cut rates by 115bps and pumped in more than ₹9 lakh crores in liquidity into the financial system; ₹3 lakh crores have been made available as guaranteed collateral-free loans for MSME borrowers.

Key reforms

• After these relief measures were rolled out, the government introduced the Atmanirbhar Bharat revival package.
• Following the adage that a crisis is a terrible thing to waste, the Prime Minister has launched bold policy reforms in agriculture, defence production, electronics manufacturing, coal mining, and the public sector. These reforms position India for the future and generate confidence among business people and investors.
• Animal husbandry has been sanctioned another ₹15,000 crores.
• Defence production is being indigenised with 101 items meant only for domestic production

There is confidence

• During these uncertain times, India remains a safe haven.
• The rupee has strengthened against the dollar, the world’s reserve currency. Opinion surveys consistently show that Prime Minister Modi is the most popular elected leader in the world; in fact, tracking polls show that his popularity has actually gone up during the pandemic demonstrating that the Indian people approve of his handling of the corona virus crisis.
• Confidence in the government has also increased. Many countries are stumbling through the pandemic.
• Meanwhile, India has seized control of its destiny and is marching resolutely toward the post-pandemic future.

Reference: https://www.thehindu.com/opinion/lead/moving-resolutely-toward-the-post-pandemic-future/article32416874.ece

Download PDF