24 Aug 2020  |   03:35am IST

Experts of the opinion India’s economy can break COVID-19 chokehold soon

The debate over timing of economic revival started as soon as unlock 1.0 was announced. Different quarters have been brainstorming on how to bring the sagging economy back on track. VIKANT SAHAY attends one such webinar to find out more
Experts of the opinion India’s economy can break COVID-19 chokehold soon

VIKANT SAHAY

India has been one of the world’s worst hit countries in the pandemic, with reported cases spiking in recent weeks. Cumulatively, India has reported more than three million cases of infections since January. Though, relative to its population size of 1.3 billion, the percentage of infected individuals is still low. 

The country’s lockdown began in late March and was subsequently extended several times. Stringent restrictions halted most economic activities and caused millions of people, many of them daily wage earners, to lose their jobs and income. 

Investment bank Goldman Sachs in May had predicted a massive 45 per cent economic decline in the three months between April to June. Ratings agency Moody’s slashed India’s credit ratings to the lowest investment grade level. 

In this backdrop, the World Trade Center (WTC), Goa Chapter organised a webinar on ‘Unlocking the Economy’ which featured senior professors, businessmen and chartered accountants apart from those who had interests to know about where the Indian economy is headed after the lifting of the lockdown.

Dr Alok Chakrawal, Professor in Saurashtra University was of the view that the impact of COVID-19 was massive but at the same time the Union and several State governments took immediate and required steps to salvage the slowing economy.

“Government is taking a lot of effort to either settle the nearly three crore migrant labourers. In fact it is heartening to see that many of the migrant labourers have started returning to their respective places where they used to work,” opined Dr Chakrawal.

He added that if the allocated money is well and judiciously spent, the economy of the country will get back to rails gradually. “I think India is on the right track for unlocking the briefly stalled economy and very soon we will get back. In fact, I see growth of many ancillary units coming up as the demand within the country will grow as there is infusion of so much money in the economy,” said Dr Chakrawal.

Noted Chartered Accountant, Sukhdeep Singh who is based in Goa was of the opinion this government is good in giving surprises. “In fact when the government announced the Rs 20 lakh crore package, it made everyone happy initially. But when the actual package was seen, only one per cent of that amount came to the people directly,” said Sukhdeep Singh before he was abruptly disconnected due to network issues. He also had emphasized that the direct transfer to the people would have given them cash in hand to spend so that it could have also helped kick-start the sagging economy.

Director of Lila Digital and Environmental Solutions Gavin D’Souza believed that when government announced packages for MSME and small-scale enterprises it should have also included the cooperative banks in the package. 

“Businesses were able to avail of a six-month moratorium on all loan repayments including term loans, working capital loans, retail loans, crop loans etc. There could be several improvements in these schemes to make the economy more vibrant,” added D’Souza. He also mentioned that there is too much paper work and several identity cards like PAN, Aadhar etc. “Why can’t we have one card which could serve the purpose for all?” he questioned.    

The market for daily essentials such as fish, meat, oil, pulses, spices etc is also slowly recovering from a moribund state. However, traders claim that sales of furniture, clothing and jewellery are yet to come back to comfortable figures. They report about 25-30 per cent sales of pre-pandemic times as they may have been categorised by the consumers as ‘luxury items’ post the pandemic. Sales of computers and laptops have grown by about 50 percent at the retail level and mobile phones sales are up by 25% in June over the same period last year.

However, lost customers of restaurants and footpath shops have not come back yet in full force because of the fear of getting infected. An increasing number of people are using online shopping to stay safe at this time of the pandemic. The use of the Internet has become critical with offices and educational institutions opting for meetings and classes online, giving a boost to mobile phone, computer and laptop businesses. “In fact there were several issues related to the connectivity and seamless streaming of live interaction during the webinar. We saw several breaks during this webinar,” said Cyril de Souza, assistant director of WTC, Goa.

During the question and answer session, the issue of demand side being left out was also raised with a pointed question reduction in corporate taxes. “The corporate have not passed on this reduction benefits for the consumers. Why do we only give sops to the supply (manufacturing) side and nothing for the demand (common people) side? If people do not have money in their pocket how can they buy any manufactured products even if they want to?” All the panelists agreed to this issue with a promise that it will now be raised at larger forums.


IDhar UDHAR

Idhar Udhar