India is enjoying a lively lockdown, to say the least, with the Prime Minister deciding upon a rather vibrant scheme of play with the third phase of our lockdown. The main reason behind this approach is the threat of an economic recession which we as a nation cannot handle due to the poor performance of the economy last year. Despite this bright scheme we may not have an equally cheerful result as the only thing we will be having, in the end, is a blunder with the economy and a widespread of Corona in the country.
Although many districts are enjoying the relaxations that come along with the green zone tagging, there are many which are locked up. Amongst those locked up, there are seven cities which together account for more than 50% of our economic output. With those seven at a complete standstill, there is absolutely no reason to open up some parts of the country which together won’t make that big a difference to our economy. Yes, they will generate some demand, some stimulation but that some won’t be enough to ward off concerns of an economic recession. What we need first is clarity on the government’s stance on the economy and the public welfare in times of Corona. At the moment, we are seeing a mixed response with some guidelines helping draw off concerns regarding the economy and some regarding the public’s state of health. We can’t solve an entire jigsaw puzzle with only some parts and the government is failing to understand that.
In my belief, the government should provide substantial financial support to the industry while simultaneously imposing a lockdown. Opening up some parts of the country isn’t worthwhile as they won’t be able to provide enough to sustain a closure in the other parts of the country. The government cannot sustain the lockdown for longer than, at best, a month and a half. the government has relatively low inflows and well huge outflows. In that case, the government should have imposed a lockdown for a little longer, in hopes of fully, warding off this threat to be ready to open up for an economic renaissance. Right now, we are at a huge risk of seeing a spike in cases from the green-zone areas if compliance isn’t met and all that risk for a small economic stimulation isn’t worthwhile.
Right now, India has an opportunity due to low oil prices and with oil being the engine to our economy we should be making the most of this window. Besides with anti-China sentimentality growing amongst many companies and countries, India has a golden opportunity. India stands to benefit a lot by bagging firms manufacturing in China as along with those firms arrives an abundance of foreign direct investment. In doing justice to this opportunity, our government has offered an area twice the size of Luxembourg along with multiple incentives to firms manufacturing in China on the pretext of luring them. With the economy in a fragile state due to this lockdown, we require this FDI to shore up the economy. To make things sweeter, this might help PM Modi to gain some ground towards his electoral promise of achieving an ambitious $5 trillion economy.
Public health is of paramount importance and thus we need to impose a nationwide lockdown which can help curtail the spread of the disease. But alongside that, we need the economy in sound shape as only then can it help generate jobs which in turn can help provide security to households and firms. We need the Prime Minister to impose a lockdown to curb the spread and the Finance Minister to provide a near-perfect stimulus package. If the two work harmoniously then we have a winner on our hands. Take for example America’s case wherein they provided exceptional economic support but no public welfare package like a lockdown and it left them with a burgeoning number of corona patients and martyrs which is still steadily increasing. India is in a sweet spot right now because of the swift action taken in the early days of the virus in our country and we should not waste all that initial effort for a blotched strategy like this. PM Modi and Co have done exceptionally well until now and this is not the time to let it all go to waste with a multifarious use of colours.