Will the Indian economy revive? or will the Modi govt be able to come up with what it takes to see India through this grueling pandemic and mount another challenge to keep hold of the throne?
These are the questions pondering over everyone’s mind now.Indian economy has taken a historical decline in GDP growth rates, rates which the country hasn’t slipped to for a long time now.But its not like we didn’t see this coming.
India’s GDP was already heading for a downfall way before the pandemic set foot and way before the govt ever implemented lockdown measures.Of course that won’t stop the govt forcing their narrative that all has happened due to the contagion.
“its the action of god” , the statement of the Financial Minister of India sums up the entire govt’s inability to decide between what is right and what is easy and failure to properly carry out the decided course of action.Is it proper for a person sitting at the top ,who heads the ministry that implements decisions that most affect the Indian economy.
From what reflects in the FM’s statements , is ignorance and helplessness.Of course this is an FM that is known to be get provoked at even the slightest of nudges from the media.
Acting in ignorance or angry behavior is proof that a person is unable to deal with the circumstances.Enough blaming the FM though.The whole central govt is to blame for the current economic slump.
What are the key issues affecting the economy in 2021?
Unemployment is at its peak and it always has been the area that requires much attention.Informal workers constitute a whopping 70 percent of India’s workforce.Its tragic that the govt thought so very little about them while implementing the lockdown restrictions, considering India is much dependent on these so called “less valued workforce”.
To be honest the govt actions during the pandemic so far has been heavily focused towards middle and upper classes least taking in to account how the rural or less fortunate will fare.
The MGNREGA ( Mahatma Gandhi National Rural Employment Guarantee Scheme ) has been a huge success, offering 100 days of guaranteed employment with assured minimum wages in rural areas.But the Modi govt is refusing to extend it to may be a full 360 days program , most probably because it was enacted by congress.
Plus the govt can implement the scheme in urban areas as well.It will be a welcome move towards ensuring employment for more of the population considering the no of migrants in cities.
coordinating with the locals is the most prudent course of action that the govt can take in implementing any job scheme.
Particularly in India’s case , local bodies like the municipalities and panchayats are well versed with the employment situation in their area.
India’s aggregate demand is on a heavy downturn
Moving on , the next most dire issue is the decline in consumer demand.The govt has been approaching this issue the wrong way.Right now the populace is deprived of spending money , since work is limited and thousands of lay offs happening round the country.
It would be most appropriate to first stimulate demand by offering cash hand outs to those living under the poverty line.
The last payout of 2000 rs was quite meagre and instead govt should be providing atleast INR 5000 in cash to those who have registered under the unemployment allowance scheme.
Yes, its going to cost quite a bit, but this will be a bold step in the right direction to revive the economy. The govt will need to spent heavily in the next few months to resume the normal economic operations.
Off from economic downturns , it needs to address the lack of expenditure on public health services , which forms just 1 percent of the GDP.The pandemic severely exposed the shortcomings of the health sector , with people suffering from other diseases unable to get treatment.
Vaccinations for diseases like tb has declined over the quarter.
Much work needs to be done and the policies and fiscal stimulus framed by the Finance ministry over the course of the next few months will decide if the govt is really up to it.