Viewpoint: Restarting economic activity

20 APR,2020 | MEDC


The government is keen to restart economic activity in green zones, or areas with a low incidence of Covid-19 cases. That is a welcome development as the economy cannot be shut down indefinitely while the medical aspect of this complex crisis is being tackled. While a final plan is in the pipeline, one suggestion is to classify areas with over 15 cases as red, fewer than 15 orange, and no cases as green. Even though the lockdown in most states has been extended to April 30, a blanket approval for all forms of farming activity with adequate safely measures in place likely. That augurs well for the state’s rural sector, which truly deserves all the assistance it can get at this juncture. It is also a logical move as most of the green areas are in the hinterland, which has been relatively unaffected by the pandemic vis-à-vis the cities. Reviving India’s rural areas by permitting strategic farming activities has to be a key policy priority.The size and persistence of the socioeconomic impact in India remains (as yet) unknowable. A V-shaped recovery seemed likely when Covid-19 was essentially a Chinese problem and China was dealing with it. But, that is no longer the case. We now have to be prepared for a period of protracted economic uncertainty, as increasing evidence is piling up in its favour. Also, powering up (or shutting down) the economy is not like operating a light bulb. It is more like handling a nuclear reactor.it needs to be done slowly and carefully otherwise the system risks a meltdown.The point to note is that economic activity has to be restarted in a gradual manner. We are experiencing a true Black Swan event, something that is witnessed probably just once in a lifetime. Any mistake made in the sequencing and extent of the lifting of the lockdown could prove costly. Apart from investing in agriculture, substantial attention should also be paid to the development of up-to-date healthcare infrastructure throughout the country. Just like the rest of the world, we also have a unique opportunity today to rewrite our economic history. We need to get it correct this time by thoughtful prioritization and execution. India can certainly emerge stronger from this crisis if we get a few basics right.

*Photo Credit: Google

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