Shared ambition must yield shared prosperity. India needs to draft a more inclusive social contract, supported & funded by public investment in the care economy, education, and health. Stronger safety net and better targeted basic income must get a second look.
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Our society is navigating through one of the most difficult phases. The pandemic has tested everyone to the limit. A generation has been affected and will continue to haunt many who lost their dear ones, scar materially and emotionally many of those who survived. It has inflicted misery on the poor and they face an uncertain, even dim future.
Pandemic has made many believe that not only are humans vulnerable, humanity is equally fragile. The world has changed for ever, and the full impact of those changes will be felt for years to come.
COVID-19 unlike other pandemics may not be a gateway to the next world
The pandemic will not be eradicated until everyone is vaccinated. It will linger around, albeit with lower intensity, weaker potency.
Amidst the gloomy environment there is a rethink of several beliefs and axiom impacting both the long and short-term choices for the economy and society. The action, response and role of the government and its institutions need to be revaluated. The acceleration and amplification of several trends and the realities as a result of this calamity has triggered a reassessment in most circles about the future of capitalism, and its many manifestations. Responsibility has shifted from institutions to individuals. The trend is gaining momentum.
The pandemic has triggered several other debates, amongst them the well regarded and accepted industrial framework, and the nature of several accompanying economic activities. Also being discussed is the efficiency versus resilience, the future of jobs etc. How do we bring about fundamental changes.
India needs a new multilateralism; based on a vision of economic development that is cored around gender equality, income inclusion and sustainability.
Redistribution trap
India’s goal for the next 5 years should be to expand the economic pie and achieve ‘near’ full employment. It can be achieved if policymakers usher in holistic reforms, and our executives implement well. We have created the platform, and have the resources to provide universal health & education, necessities to all, life of economic dignity to the poorest, and prosperity to most.
However today, and in the immediate there are challenges galore. A Crux study highlights about 10% of the migrant labour may never recover emotionally, many more financially. A fifth of the micro enterprises have lost their business. A majority of the poor have sunk their life-saving for hospitalisation. One in ten has lost livelihood. Most amongst them have lost the will to rebuild. Support for the poor and the deprived remains inadequate. Many who emerged out of the poverty trap are getting sucked in.
Upended society, altered behaviour
The COVID-19 pandemic has upended society, and inflicted tragic losses. It has been a defining moment for business as well. The Crux study across 500 senior executives, 100 policymakers and social commentators titled ‘how India Inc. is responding to the evolving ethos’ has several ideas, and many lessons.
The crisis has radically altered stakeholders’ behaviour. It has accelerated technology adoption, ‘amended’ several engagement imperatives, short-circuited’ business processes. Online commerce, contactless ‘relationship’, remote working, gig jobs, healthcare pivoted around technology, digital learning and entertainment ‘at will’ are now commonplace. They will only grow stronger, become more prevalent, even customary.
The Crux insight articulates several redeeming features from the crisis. Over 80% of the respondents believe that the calamity is a wake-up call that must ‘persuade’ the humanity to coexist, cooperate, and solve bigger problems. The world should collaborate to address profound challenges of climate change, hunger, and health. They hope India will intensify its focus, and adopt collective attention to both ‘pre-empt & prepare’ for similar scenarios. The study articulates, India has both ingredients and instruments to emerge stronger.
Corporate sector sees blue skies. Agile will emerge stronger
Most respondents feel we will look no worse, and significantly better if we stop thumping our chest. We must have the humility to recognise, the resolve to address several embedded problems.
The corporate sector played an exemplary role. They rushed help, focused on employees and partners. The business leaders believe they have undergone several ‘stress’ tests, that has clearly exposed their failings. The learning has been insightful, though less palatable. Over 80% believe the agile will emerge stronger from the crisis.
Over 75% recognise that the approach to business needs a rethink; the pandemic has accelerated an interdependent world. A majority believe business will eventually recover after a wrenching period of slowdown and job cuts. Most are equally seized of the need to a longer-term reinvention and putting the learning in practice. Recognition is only half the battle. The corporate sector must learn to measure risk and mitigate that by designing bold and impactful interventions. Many are rethinking missions, reinventing business models, redesigning strategies, collaborated for ‘on-demand’ supply chains and restructuring operations.
The Crux study highlights a third of large companies have ‘digital as the core’ in their strategies. A few are progressing to ‘hybrid’. This trend could be a huge opportunity for the mid-sized organisation to ‘plug’ in, and build an agile, ‘demand-sensing’ support system for the larger organisations.
Government has the fiscal bandwidth, and must go long.
Amidst the calamity India needs to be prepared to allocate a higher amount for healthcare as most poor don’t have the resources to access quality healthcare. The policymakers need to pay attention to even a more serious challenge of food, and income security of the truly deprived.
Uneven and lumpy growth
It needs to identify both the means and the methodology to nurture the MSMEs for revival. India has the demography to be a ‘consumer’. Demand creation churns the virtuous growth cycle and should be a priority. GST rate rationalising will help. Infrastructure creation, rural development is long-term growth multipliers.
Shared ambition must yield shared prosperity. India needs to draft a more inclusive social contract, supported & funded by public investment in the care economy, education, and health. Stronger safety net and better targeted basic income must get a second look.
The choices that the policymakers make will shape India for decades to come.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.