What do we need to do to revive the economy?

NEW DELHI: The challenges arising from the Covid crisis are far from over and relief measures need to be carefully directed to revive the economy, experts said on Thursday at the global online conference, ‘Covid 19 — Jaan bhi; Jahan bhi’ organised by The School of Management of Bennett University, part of Times of India group, and sponsored by Darwin Industries.
Covid-19 crisis has blown a RS 18-lakh crore hole
The government needs to take steps to generate demand, said former chief statistician Pronab Sen. “My total estimate of damage (during lockdown) is Rs 18 lakh crore.... Matters get much worse if at least a part of that is not made good by public intervention and you will have the multiplier operating and the total loss of income in the country will go up by Rs 35 lakh crore. So, there is a need to intervene early.”
Pronab Sen
“If you are talking about Rs 20 lakh crore going into rehabilitation and creating capacity (then) it is large. But much of that is not. The real point is also the period in which the amount is going to be spent. Rs 20 lakh crore in one year is one thing and Rs 20 lakh crore over three years is a different ball game.”

Atmanirbhar is not isolation
“Atmanirbharta is not an inward-looking economy detached from the globe (but) about working and engaging with the world from a position of strength,” commerce and industry minister Piyush Goyal told the conference on Thursday. Goyal said that it is not about “disassociating yourself from all the good things that one can learn from the world”.
Piyush Goyal
“If one was to research on how different nations responded to the Spanish flu, 100 years ago, you will observe that those nations which focused on the lives of their people… progressed much faster, grew much faster and became prosperous nations. Those nations which only focused on their economies, suffered.”

Rs 20 lakh crore essential, but not sufficient
Kaushik Basu, who was chief economist at the World Bank and chief economic advisor to the Indian government, said the stimulus announced by the prime minister is necessary but not sufficient given the dark clouds of recession and unemployment. While government spending would create inflationary pressures within six months, there was a need to move ahead now to protect the vulnerable sections and take corrective measures later.
“If this Rs 20 lakh crore were an additional amount this should be enough. People who are scraping through the details are saying that it is not additional and it includes what RBI has done. If the additional amount is half (of what is announced) it is not enough...
Immediate concern should be the hundreds of thousands who are walking hundreds of miles only to go home, those who are walking in large groups but are all alone.”
Time to dismantle APMC
The government should use the Covid-19 crisis to usher in long-pending reforms, said Soumya Kanti Ghosh, group chief economic adviser, SBI. “Time has come for dismantling the Agricultural Product Marketing Committee (APMC) and let farmers directly sell their produce to the buyer. It will also help in better price discovery,” he said.
Abheek Barua, chief economist and executive vicepresident, HDFC Bank, said, “The government is not going down the classical fiscal path. Instead it is using some tools (giving guarantees for loans) available with it. This will set off a virtuous cycle of fund flows and potentially stop bankruptcy.”
We need to revive demand
Shubhashis Gangopadhyay, founding dean of Indian School of Public Policy, said, “Right now, none of the measures are addressing the demand side, they are all addressing the supply side, which is all good, but the engine can only be demand... The government going on a spending spree is better than a government giving liquidity.... Instead of making policies for producers, for MSMEs or foreign investment, we have to start making policies for the Indian citizen.”
Shubhashis Gangopadhyay
Tech solutions like Aarogya setu hold the key
Amitabh Kant, CEO of Niti Aayog, said the Aarogya Setu app has helped identify 130 real hotspots 3-17 days in advance before the health ministry notified the areas as hotspots. “Aarogya Setu is key to flattening the curve.” In a post-Covid-19 world, three new areas will emerge as opportunities. India will emerge as the global manufacturing and export hub, digital payments will rise and healthcare will go digital with cloud hospitals. “This will reduce the cost of healthcare. Telemedicine is the future.”
Amitabh Kant