Difficulties in your life do not come to destroy you, but to help you realise your hidden potential and power, let difficulties know that you too are difficult.
Dr. A. P. J. Abdul Kalam
World is caught in the cruel grasp of Novel Corona or Covid-19 pandemic. In a very short span, it has made unprecedent tremors in the socio-eco-pol spheres. Infection, death and collapsing health care have become a routine headline. The rapidly and blindly moving world has been suddenly braked, and its future is in the pinching lap of uncertainties. In India, the number of infected people is steadily increasing and has already crossed around 74,000 in last 4 months. India is more prone because of the continued neglect of the respective government on strengthening solid health care infrastructure to combat such deadly viruses. The sluggish Indian economy is moving towards an unwanted future and is hanging somewhere between the dilemma to save live or livelihood. But, the true character of a nation comes out in the face of adversity, and remember disruption is nothing but an opportunity for action.
India, the second fastest growing nation, is facing the heat of covid, however, the post covid challenges are further scary.
Post Covid Challenges:
As India has a highly diversified geography & demography, the challenges are also too diversified. Some of the significant socio-eco-tech challenges are:
- Widened fiscal deficit: India’s budget is preliminarily facing significant fiscal deficit, meaning expenditures are more than receipts. Such pandemic will surely hammer governmental receipts on one hand, and is bound to re-allocate/ incur huge expenditure on its recovery measures. It will lead to stressing deficit financing which will result further broadening the financial obligatory and reduces global credit feasibility.
- Reverse migration: With extension of lockdown putting an indefinite lock on the industries forced a large bunch of workers to return back to their native places. Further, such panic and uncertainties have made an imperative impression on their attitude. Even on opening of these industries, availability of workers in larger numbers is not at all easy because their attitudinal fear will take time to adjust the normalcy.
- Downed tour and travel sector: In last few years, India has emerged as a destination hub for foreign tourists. In fact, Goa, Varanasi, Delhi, Agra, Kerala etc. have attracted a significant number of recurring tourists assisting concerned states to explore the floor of opportunities for travel industries. This cruel pandemic has soared the upper cream and unfortunately, is not expected to recover soon.
- Loss of international market share: In last 4 years, government focussed on creating a wide international market for products manufactured in India’s domestic territory. The “Make in India” campaign was steadily expanding its potential coverage, but Covid-19 has stuck the global market outreach. The opportunist countries are making efforts to capture the vacant markets.
- Endangered MSMEs & Real Estate: MSMEs are likely to be the most affected by this economic lockdown, as they don’t have the buffers or access to cheap capital. With collapsing demand, unlikely to recover soon, it will be really difficult for them to meet its financial obligations for repayment of loan, and wages to their employees. In addition, the prevailing twin balance sheet problem of real estate will be further in tensed and lead to widening NPAs.
- Development Projects: With large revenue cuts, development expenditure of most states has to be largely dependent upon centre extended aids. However, centre too don’t have much options. Both governments are facing financial crunch. So, the overall developmental roadmap doesn’t seem to be very bright in night.
- Unflagged Nation-Builders: Almost 90 percent of India’s workforce is informally employed (Periodic Labour Force Survey 2017-18). These people (human resource) are most vulnerable as they have no labour, social or health protection. Covid is directly destroying their lives and livelihoods.
Way-Ahead
“Challenges are inevitable, only who understands the challenges and crafts timely corrective measures lead.”
- Strengthen our basics: Begin with investing in the three basic needs and three basic services- food, water, shelter, healthcare, education, and banking- that people and societies need for their well-being. By focussing on these six, we can make sure that our post pandemic society is both sustainable and equitable.
- Attention on Shadow Citizen: The vulnerable section of the society should be kept in epic while tailoring the relief or stimulus packages. The size of this section is equally significant. Attempts must be made to equip and bring them in the mainstream. Till then, it should be strongly remembered that these people deserve first right on the national resources.
- Sensible Financing: To urgently finance the handsome fiscal demands of creeping economy, direct governmental stimulus or guaranteed credit can be extended to primarily to banking sector, and eventually to other sectors. If not, government can direct RBI to print fresh currencies. Balance sheet problem needs to be sorted out. But measure must be utilised with utmost caution only as a short-term developmental measure and to avoid any repercussions.
- MGNREGA-150: To revamp the rural economy, the guaranteed working limit under MGNREGA can be enhanced from existing 100 days to its maxim 150 days. The shock of the lockdown and the loss of employment can be countered only with guaranteed tenure and income.
- Stimuli to MSMEs: A bag of financial stimulus and effective infrastructural services, is desperately required to bring the workforce absorber on track. In addition, 6 months moratorium period can be extended to industrialists.
- New Job opportunities in rural sector: As rural India is least affected by covid, major social infrastructural development projects can be diverted to it. Further, it will neutralise the consequences of reverse migration.
- Liberalise FDI norms: India can divert the international switching organisations towards Indian soil. Indeed, India enjoys the long-term economic advantage of demographic dividend and demand-based economy (readymade market) with improved ease of doing business rankings. However, labour, land and taxation laws, must be suitably modified to meet the global standards. A proactive initiation of New Delhi can bring billions of foreign investments to help in strengthening Indian economy.
A mid global health, economic and humanitarian crisis, India has the potential to strengthen the fundamentals to fasten future prospects. Constructive national and international opportunities can be mined to bring positives even from the negatives. There is a full hope and scope for creating new co-operative competitive world. We are sure that India will bounce back with safer, smarter, and stronger strategies to lead the post covid globe.
(Writer is a Research Scholar at DDU, Gorakhpur and Chief Advisor of Finance and Economics Think Council)