22 JUN,2020 | MEDC
The government is cautiously reopening business activity with nuanced measures as India’s Covid-19 count crosses 400,000, and the death tally is well over 13,000. However, the good news is that green shoots of economic growth are now visible all over the country. The Prime Minister has rightly said that the more we can stop the spread of coronavirus, the more we will be able to open up our economy, which has suffered immensely due to the lockdown. India’s recovery rate is now over 50% and that is commendable. Of course, there is no room for complacency, even though the economy is gradually reaching the levels where it was before the pandemic. Most offices (both public and private) are opening and people are returning to work. Power consumption is rising and the amount of fertilizer used in May was double the consumption in the same period last year. Compared to 2019, kharif sowing rose by 12 to 13%. Two wheeler demand and production has crossed two-thirds of the pre-lockdown levels. Digital payments in the retail sector are improving, and toll collections in May showed a healthy rise. After export weakness for three months, there was a bounce back in June. All these indicators point to the emergence of green shoots in the economy.However, with the approaching monsoon, managing the pandemic could be problematic. Adhering strictly to social distancing could also become difficult. There is no doubt that our Covid-19 warriors are doing good work in adverse conditions, and the public is also, by and large, quite cooperative. The lockdown has mostly served its purpose by way of containing the spread of infection. From the economic perspective, the good news is that India is predicted to experience a normal monsoon this year. That will help to further nurture the green shoots in the economy. On the flip side, with the return of migrant workers to their native places, there is a risk of rising infection in rural areas. Given agriculture’s extensive linkages with the mainstream economy, the situation cannot be taken lightly. Yet, there is reason for optimism. Indians have always displayed remarkable resilience and their entrepreneurial spirit remains intact in the harshest of circumstances. Green shoots in the economy are now visible, but they cannot be taken for granted. Policymakers will need to continue their fine balancing act between maintaining public health and unlocking the system, while simultaneously remaining open to feedback from all stakeholders.
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