The novel coronavirus or Covid-19 has decelerated the fast-paced wheels of
India’s Economy to some extent. Health services in India have been strained.
India’s economic growth forecast as per International Monetary Fund (IMF) has
been estimated at 12.5 percent for 2021. However, with a real Gross Domestic
Product (GDP) growth at -7.97 percent, the task at hand to achieve a growth of
12.5% seems quite difficult. The economy of India is known as a middle-income
developing market economy. India’s economic rank stood at 138th by
GDP in 2020.
With the pandemic still looming large, the informal sector workers have
been adversely affected as their wages have ended due to regular lockdowns.
So, how can India revive its economy post-Covid-19? Here are a few ways
that can help India provide a boost to its existing growth rate.
Investment in Sustainable
Infrastructure
The most effective way to create jobs and provide a boost to the Indian
economy is by investing in Infrastructure. But what kind of infrastructure
should be focused upon? After the 2008-09 financial crisis, South Korea
invested nearly 70% of its stimulus towards developing green infrastructure. It
helped them rebound faster than other economies of the world. Similarly, the
United States invested heavily in green energy and public transport after the
2009 Great recession. This helped the US create more jobs compared to
traditional investments.
India can also make use of this opportunity and invest in renewable sources
of energy to bring its economy back on track. The initial focus can be on the
use of rooftop solar panels. Solar power can help spread the reach of critical
services in remote parts of India. Investing in cold storage facilities and
supply chains can help farmers avoid losses by ensuring the preservation and
timely distribution of agricultural produce. These sustainable measures can
greatly help in achieving a faster growth rate.
Provide support to the most vulnerable
section of the society
90% of India’s workforce works in the informal sector. This section also
bears the maximum impact of economic shocks due to Covid-19 and needs greater
access to social safety measures and credit benefits. They also need a greater
impetus when it comes to pension and insurance schemes.
Moreover, access to quality education, fresh air and clean water should be
at the center point of the country’s future economic policies.
Extend financial assistance to MSME’s
during Covid-19
The Indian government has already started to strengthen Micro, Small and
Medium Enterprises (MSMEs). It has announced an economic stimulus of INR
1.7 trillion and is also planning for another bailout worth INR 750 billion for
MSMEs. The capital infusion in the MSME sector will provide a great impetus for
the industry to recover soon after the Covid-19 pandemic.
The auto industry will also need the government’s aid to regain its ground.
The government can make use of this opportunity to promote green technologies
by making this aid conditional on enhancing fuel efficiency and clean energy.
On the other hand, taxes on luxury commodities with adverse environmental
impacts can be levied to discourage their usage. Increased cash flow in the
hands of the people will further increase their purchasing power thereby,
encouraging higher economic development.
Temporary Universalisation of PDS
Making food available to people for almost a year can take off the burden
of households to a great extent. Another way of increasing the purchasing power
of households, this method will leave more money in the hands of people for
them to spend on other forms of consumption activities.
The combined stock of rice and wheat in the central pool stands at 830.50
lakh million tonnes (MT) in May 2021. About 66 MT of food grain is needed in
order to universalize PDS for 6 months. We have more. Universalising PDS for
about a year can act as fuel to power India’s economic growth as expenditure on
food is one of the principal expenses of any household and with the
universalization of PDS, their purchasing power will increase substantially.
Promote technological initiatives and
advancements
At last, we all know the role that technology will play in the future. As a
result, the technology sector will see greater employment opportunities. We
have seen small countries like Israel and Japan doing wonders with rapid
technological advancements.
The need of the hour is to not only support the technology sector but also
to create a favorable environment for the usage of new gigs and tech. This can
be done by placing the right regulations and ensuring data privacy so that the
consumers can access new technologies without any fear of their data being
stolen or manipulated.
These decisions will help in securing a lasting economic recovery along
with ensuring sustainable development. The Economic Survey 2021
highlighted the government’s efforts to scale up India’s health services. While
the health sector remains the primary focus of the government, the
above-mentioned ways can serve a great deal for the revival of India’s economy
after the Covid-19.
above-mentioned ways can serve a
great deal for the revival of India’s economy after the pandemic.
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