Approach to post covid challenges in India

This year 2020 will go down in history as the social break between pre-covid and post-covid times.  What unfolded as a health crisis has turned into a deep  economic crisis, pulling the world into a recession.  Uncertainties loom large and the world over policymakers are striving to strike a balance between lives and livelihoods.  India and the rest of the countries are no exception.

The pertinent question is how to overcome the post-covid challenges and bring new opportunities? 

The government of India has taken several supportive actions to mitigate economic losses, including ‘Atmanirbhar Bharat’ package and the introduction of specific schemes to boost consumption and investment.  RBI on its part has been taking regular measures to ensure liquidity support.  The government has also ushered in significant reforms in areas such as agriculture, defence, space, mining and other sectors as well as labour laws. 

The latest announcement of Atmanirbhar Bharat package 3.0 has given a further boost to the economy and has the potential to lift growth, employment, exports and make India a part of the global value chains.

With positive developments on the vaccine front, there is hope that the crisis shall soon pass.  However, post-covid times will not be the same as pre-covid.  There will be many more aspects that were used and developed to meet the challenges faced during this time that will be mainstreamed going forward.  As a nation, we would need to continue to develop a strategic response to the crisis and its aftereffects.

The crisis has left deep imprints on the micro as well as macro-dynamics of every economy.  At the macro level, policymakers will have to relook and re-design their strategies for the future, keeping in view the geo-political and geo-economic landscape.

The covid-19 crisis has also opened several opportunities for the India.  These should be identified and leveraged for a better future.

Foremost, India will play a major role in post-pandemic global recovery.  With India accounting for almost 60 per cent of global vaccine production, the country has a huge opportunity in manufacturing Covid-19 vaccines for the world at large.  On the economic front, an early growth recovery for India will support global growth as well.

Recently, India administered a record 25 million Covid-19 vaccines, setting a world record for single-day inoculations.

There is an unequivocal view that India could expand its global trade due to the new geopolitical landscape emerging post the pandemic. 

According to the Economists, there is an opportunity for India to gain from the reorganization of global supply chains, involving a shift from China.  In the future, many companies will follow a pattern that has been labelled as China.

While the Government has identified Champion Sectors for providing special support over the next five years under the ‘production linked incentive’ [PLI] scheme, there are some sectors where India has the potential to be a global leader and need to be adequately supported.

Media & Entertainment is another industry where India has significant potential to emerge as a global leader.  Skill development is another important measure as training in cutting-edge technology will be required if India is to become a media and entertainment powerhouse.

The opportunities are wide-ranging.  The pandemic has highlighted the role of the digital economy across sectors and even post the crisis, the digital way of functioning will continue.  It has been highlighted that the potential of digitalization for making India a global digital powerhouse.

Sustainable development of Agriculture is perhaps most important as it is critical for global food security and poverty reduction.  The outbreak of the Covid-19 pandemic brought these concerns once again to the fore.  Innovation and advanced technologies are much needed for food security and to ensure sustainable agriculture.  India needs more digital solutions to make the agriculture sector resilient to shocks.

On the healthcare front too, digital solutions have become critical.  In order to make India pharmaceutical industry even stronger in the post-pandemic world by providing an enabling eco-system for developing self-reliance in APIs, creating centralized infrastructure, building common utilities and easing regulatory clearances. 

India’s reform agenda is not limited to just these sectors.  There are a plethora of areas where we need to improve and perform better, be it in the social, economic or legal fields.  Strengthening India’s financial sector is thus extremely important.

Also, it is essential for making the Indian banking and financial sector robust.  Additionally, the banks and other financial institutions need to strengthen their capabilities to assess and process risks.  They need to harness the power of data analytics for better decision making.  Even we cannot ignore the importance of the ecological approach for all economic activities.

The crisis of today is learning to face the challenges of tomorrow.  Many of the problems are not new, they probably need new solutions that are pragmatic yet futuristic.  Responsible actions are desired from everyone – governments, industries, firms as well as individuals and collectively as a society to enable a better and sustainable future.