From the start of the Covid-19 crisis, economists have been remarkably united on what policymakers should and should not worry about from an economic perspective. The terrible sharp fall in GDP which resulted from health-related restrictions, as well as individuals’ own decisions, is not the main concern – indeed, it is necessary to suppress the virus and therefore allow economic recovery. Rather it is to prevent permanent damage to the economy that government and policy makers should worry about.
Thanks to the COVID-19 pandemic, the globe is currently seeing a recession that has not been caused by any banking crisis or oil shocks ever. The World Bank projects that 90% of nations will be facing a recession in 2020 and 2021. Globally, the GDP figures are set to shrink including that of India.
The Prime Minister of India said India’s quest to become self-reliant is not just a vision but a well-planned economic strategy. “A strategy that aims to use the capabilities of our businesses and skills of our workers to make India into a global manufacturing powerhouse; a strategy that aims to use our strength in technology to become a global centre for innovation; a strategy that aims to contribute to global development using our immense human resources and their talents.”
- 20 lakh crore package to revive the economy
- Ban of Chinese Products
- Make in India Initiative
- Reforms in Manufacturing sectors
The Reserve Bank of India (RBI) has announced various measures as part of a strategy to tackle the second Covid-19 wave within the country. The measures will facilitate healthcare providers, key medical suppliers, small borrowers MSMEs and businesses.
Measures taken by RBI
- Term liquidity of Rs 50,000 crore for emergency healthcare services such as vaccine manufacturers, importers and suppliers of vaccines and priority medical devices, hospitals and dispensaries, pathology labs, manufacturers and suppliers of oxygen and ventilators, importers of Covid-related drugs, logistics firms and also patients for treatment
- Special Loans to Small Finance Banks, Priority Lending to Micro Finance Institutions and Credit to Micro, Small & Medium Enterprises
- New Resolution 2.0 for individuals, small businesses. The RBI has allowed lending institutions to extend the restructuring window for borrowers.
- Introduction of more customer-friendly options, including the use of digital channels for the purpose of periodic updation of KYC details of customers.
- The RBI has also announced certain relaxation with regard to availment of overdraft facility by states.
The Indian economy is already getting back on right track quicker than expected. Moreover, sooner than ever India will also signal to the world that this is a new India which believes in markets and market forces, a new India that works towards growth and stability. Be it Corporate Sector or Monetary market or Banking Sectors, Indian Economy has begun to bloom again with new normalcy. Doors are opening for the new buds and investors not only from India but from around the globe.
Moreover, the key advantages that India offers to the world such as human resources, innovation and technology strengths and a vibrant business ecosystem with a focus on Environmental, Legal, Social and Governance standards. This will go a long way towards attracting foreign investors and reassuring them that India is open for infinite business as a stable and resilient partner for them.
Dr. Sanjay G. Mishra
Shree L. R. Tiwari Degree College of Arts, Commerce and Science