Viewpoint: Reopening the economy

15 JUN,2020 | MEDC


 

From this week the government is reopening the economy in a calculated manner, thus marking the start of Unlock 1.0 – the first phase of the end of the prolonged lockdown that began on March 25. This is coming at a time when infection in the country is rising rapidly. India has already surpassed Spain to the fifth spot among nations worst-affected by coronavirus, and Maharashtra alone has more affected than those in all of China. However, a measured opening up of the economy has also now become imperative. This fragile situation will test the innovativeness of Indian corporates, who now need to venture outside standard paradigms to raise capital and strengthen their fundamentals from the economic crisis caused by Covid-19. All businesses will need to redraw plans to abide by the new safety rules, and some will be better equipped for it than others. It is only when footfalls rise, that one can say that the government’s strategy – at least on the economic front – has been successful. However, the government has rightly said, that relaxations should not be taken for granted if India is to ward off the infection. Opening up the economy cannot take place at the cost of deterioration of public health.Many firms are also looking forward to woo back their migrant workers with offers of better work conditions, wages and healthcare. This is a welcome development showing that Indian employers are increasingly valuing the services of their employees. However, the vast majority of India’s workforce is still in the informal sector and reviving that is going to pose the biggest challenge. Opening up the economy is a necessary first step to the unlocking process, but it needs to be carefully monitored keeping an eye on potential risk factors. Maharashtra has 35% of all Covid-19 cases in India, and 30% of samples tested in Mumbai are turning out positive. Incidents of infection in rural areas are also now rising, as an urban exodus occurs there. Under the circumstances, India Inc. will probably retain about half of its employees in the work from home mode for the foreseeable future. The physical safety and economic survival of millions of Indians depends on how astutely policymakers handle the impending Catch-22 situation. The economy cannot be kept forever in limbo, but compromising public health is too high a price to pay for any revival. Only time will tell if we are on the right track.

*Photo Credit: Google

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