Revival of the economy will now be the top priority of the Narendra Modi government, despite a surge in the number of coronavirus cases in the country. When the Centre imposed a stringent nationwide lockdown for weeks on March 25, the country’s economic activities came to a near halt. But now it has shifted gears and decided to focus on boosting demand even as several states showed their unwillingness to open up immediately.
“Economic activities have to take off now. We need to learn to live with the virus and need to take all required prevention measures including social distancing,” Gopal Krishna Agarwal, the Bharatiya Janata Party’s national spokesperson on economic affairs told IN.
According to the World Bank’s Global Economic Prospect, India’s economy in the current financial year is expected to shrink by 3.2 per cent, while global economy could contract by 5.2 per cent, the worst since World War II.
“While economic activities can fully revive only once the spread of the virus comes under some control and people see the number of cases coming down, we need to rethink our strategies and identify certain sectors such as e-commerce and agriculture which can perform well despite this situation and create economic value,” Nirupama Soundararajan, senior fellow and head of research, Pahle India. Tourism is one crucial sector that needs to be boosted as it is a job generator across organized and unorganized sectors.
Soundarajan added that credit disbursements have to be augmented to ensure that demand for working capital is met. “Working capital is the need of the hour and a mechanism must be put in place to ensure that the chain is maintained.”
Meanwhile, rating agency Standard & Poor’s, which retained India’s sovereign credit rating at BBB- with stable outlook, said that the country’s strong democratic institutions, above average real economic growth, and sound net external position could push growth in the post-Covid phase in 2021.
Agarwal said two months ago, the priority of the government was to deal with the disease. “The lockdown enabled us to deal with the novel virus and build the required infrastructure along with awareness, that has been achieved and now we need to shift our focus,” Agarwal said.
As reports have suggested that the coronavirus cases in India could peak only by July, the Central and state governments too are reeling under pressure to further tighten their healthcare infrastructure.
The Delhi government has already indicated that the national capital would require 150,000 beds by July end if it has to cater for patients coming from other places..