The nightmare: Some lessons and hope

Annus horribilis. The year 2020 cannot be described in any other way! And even after the pandemic recedes, the scars will linger and fearful shadows will lurk. Nothing can be the same again for us who have survived this bleakest patch of history.The economy has been pulverized. Going into freefall, it has been confronted with huge declines in revenues, unemployment, disrupted supply chains, declining demand, fall in investor sentiments -- every economic nightmare came true. Amidst the need to survive physically, was the need to survive economically.

With The GDP truncated, our growth figures were subjected to unimaginable contractions. Falling like ninepins was every growth indicator. Early in the year we were extinguishing economic fires but were hopeful. By mid-year, our optimism was waning.The most stringent lockdown brought in unforeseen effects. We witnessed a migration of unprecedented proportions. Our growth models which only thinly factor the large sector of unorganized labour were left with their entrails showing, exposing our fragile social security safety nets.

The decline in demand stymied growth in the manufacturing sector, particularly the MSMEs whose very survival depended on liquidity. Sectors like Aviation, Travel and Tourism, Hospitality which hire around 9.5 crore people in direct and indirect employment, were stressed and contributed to the contraction. The services sector which contributes substantially to the GDP went into a tailspin and will make recovery slower.

Timely relief measures did manage to stem the fall. Social security packages and the Emergency Loan Guarantee Scheme, a part of the Atma Nirbhar Bharat package, infused liquidity. The fiscal stimulus packages provided some succour to the very distressed. Sceptics may say it was not enough, but in a country as diverse as ours, these measures made the difference.

It is hard to find silver linings in such a dismal scenario. But with a good monsoon, agriculture managed a 3.4% growth and the manufacturing sector, against all expectations, registered a 0.6% growth. These small mercies will go a long way in our path to recovery.

There is another light at the end of this tunnel. There seems to be a paradigm shift in the way we are defining economic growth. Already we are talking about circular economies, refurbishing, reshaping, recycling. Perhaps we may be looking at new indices that include the poor in a more meaningful way, because our symbiotic need for one another makes for collective survival.

We are currently preoccupied with predicting how the economy will recover using every letter of the Alphabet. Will it be a V, U, W or K-shaped recovery? While we are it, the year 2020 has taught us lessons. One of them is how to redefine the way we measure poverty and prosperity and more importantly , collective well being.

(The author is acivil servant)