MODINOMICS in COVID-19 : Bagging the debate!

70 years since we've achieved political freedom, the seeds of economic freedom were probably sown only in the early 90s under one of India's unsung heroes PV Narasimha Rao. However the political dynamics in the two decades thereafter have seen different policy paradigms being pursued due to electoral compulsions. Also the last few years of the UPA II were marked with anything but high inflation, low growth and policy paralysis.

 

It is in this background of the economy that our honorable Prime Minister took charge in year 2014. Since then, India has witnessed a plothera of changes in economic, political and social policies of the government. Talking of the economy and specifically focusing the changes in last two years, isn't it worth a laud that India still signals 'sab changa hai' sentiment?

 

The advent of the COVID-19 pandemic knocked the Indian doors in the month of January 2020. The year which was supposed to see the fulfilment of the ‘Vision 2020’ of Late Dr. A. P. J. Abdul Kalam, actually posed many serious challenges in front of our nation and the government. For the Indian Economy it was nothing less than a nightmare. The already sluggish GDP growth rate rapidly turned southwards and started demanding some concrete policy response from the government.

 

 

With the stopping of flow of liquidity in the markets the purchasing power of the consumers dipped thereby adversely decreasing the demand for goods and services. This in turn disturbed the supply and production side of the economy. All in all the growth rate of the economy started to fall rapidly. This situation posed several problems like steep rise in unemployment, lack of liquidity in the market and so on and so forth. The government now had a dual challenge; first, to arrest the spread of the dreaded disease and secondly, to stop the downfall of the economy and quickly push it into the revival mode. While the global super powers were getting depressed due to the uncontrolled spread of the disease and rising number of deaths, the Indian response was composed and calculative.

 

The Prime Minister, through his assertive speeches, gave a very positive message to the nation and the economy. While tackling the containment of the disease on a war footing, the economic issues were also getting priority. Series of efforts like the 1.70 Lakh Crore ‘Pradhan Mantri Garib Kalyan Yojana’ in two stages coupled with the monetary measures of the Reserve Bank were the first steps towards the goal. Further, the clarion call by the Prime Minister about ‘Atmanirbhar Bharat’ or self-reliance can no less be compared to the rise of Japan after the nuclear attack in world war two or the superb rise of Israel after it birth. This call has awakened the aspirations of millions of Indian, to innovate and fight back. It has given a new vision and a sense of faith on oneself and one’s nation and served as a pep talk.

 

The slogans like ‘vocal for local’ have motivated the Indian entrepreneurship and have again set the wheel rolling. We are now one of the largest exporters of PPE kits and those too producing superior quality products at very low cost. These desperate measures taken in these desperate times are proving that though the Indian economy is currently passing through a dark tunnel the end of the tunnel is very near and greener pastures lie ahead.

 

In a country with many poor people, the primary economic issues are growth and reaching the benefits of that growth to those at the bottom of the pyramid, in an environment of macro-economic stability, now piled uo with the COVID-19 spread. To the credit of the government it is undoubtedly making an earnest attempt to revive the situation and be back to normal!