Economically India is facing its greatest emergency since independence. We have had many recessions in past, but all that was due to some financial market failure or Industrial losses. None had such severe consequences as we are witnessing now, the complete World is under shutdown. Billions of Dollar is being wiped out daily. Unemployment is at its highest level.
We should now plan for what happens after lockdown, if the virus is not defeated immediately. It will be hard for our country to be in cages for longer period. The social and economic damage could be catastrophic.
India needs to ensure poor and non salaried poor middle class who are prevented from working can survive.
Government should introduce universal basic income. Construction workers, Labours, farmers are the key driver of informal economy. If we can guarantee their basic income, the economy can bear with this paralyze.
Granting loans will help small businesses. Micro small medium enterprise must be provided with minimal interest loan with a defined payback period of 1 year.
We will have to cut down our unnecessary expenses. This is not the time to experiment new horizon. We should focus on our strengths.
The consumption will decrease and the government must make all efforts to retain our consumption level by distributing money in the bottom level of the pyramid.
The corporates never run a country. Like we saw our previous effort of government to reduce corporate tax didnt have any positive impact on our countries economy as they only constitute 2 perc of the population. Poor GDP and income tax collection over past year is certainly a cause of concern as it shows we have fiscal balance. Our government fiscal resources are certainly a worry,we have to prioritize cutting back or delaying less important expenditure.
We should be able to adapt new technology and processes.
Exports, FDI and consumptions can actually save our country from this recession. But I am confident we will come out of it together like an Invincible.
Sunayan Mukherjee PGBM – XLRI
29th March 2020