| | DECEMBER 20209ON 01 SEPTEMBER 20, THE MINISTRY OF STATISTICS RELEASED THE GDP FIGURES FOR Q1 (APRIL TO JUNE) FY21, WHICH SHOWED A CONTRACTION OF 24 PERCENT OF OUR ECONOMY AS COMPARED TO THE SAME PERIOD THE YEAR BEFOREImpact on Global& Indian EconomyImpact of Covid 19 is not restricted to loss of lives alone. Economic impact of the pandemic is even more telling. As per the latest report of WHO, the economic and social disruption caused by the pandemic is devastating: tens of millions of people are at risk of falling into extreme poverty, while the number of undernourished people, currently estimated at nearly 690 million, could increase by up to 132 million by the end of the year.Millions of business enterprises face existential threat. Nearly half of the world's 3.3 billion global workforce is at the risk of losing its livelihood. Food systems are disrupted, as are the global supply chains. Marginal farmers, labour & migrant workers and indigenous people are worst hit. Manufacturing and production is at an all-time low.On 01 September 20, the Ministry of Statistics released the GDP figures for Q1 (April to June) FY21, which showed a contraction of 24 percent of our economy as compared to the same period the year before. IMF in its report released in October 20 has sharply revised its projection of contraction in India's gross domestic product (GDP) for 2020-21 from 4.5 percent earlier to 10.3 percent citing the rise in Covid-19 cases. The organisation, however, added that the country's economy might rebound with an 8.8 percent growth rate in 2021-22, higher than the 6 percent it had forecasted earlier. However, our competitor China is expected to grow by 1.9 percent this year, faster than the earlier forecast of 1 percent.India's all time high FOREX reserves of $560 billion offer no solace though!Right now, things look uncertain but I am personally cautiously optimistic since India could emerge as an alternative to China as a manufacturing hub and attract substantial investments.What India Needs to Do I would presume the worst is already behind us. Finance Minister is already talking of a V-shaped pattern of recovery. To stimulate consumer spending, the government has announced measures worth $10 billion recently.We need to first of all prepare a long-term plan to deal with such disruptive pandemics in future so that such shocks could be absorbed as part of a long-term strategy. Asper my information, Niti Aayog is already working on such a plan under the directions of the PMO.We need to be build capacity to deal with such crises in future; robust infrastructure, well trained clinical and technical staff and standardised policies & protocols, not to mention international collaborations and cutting-edge R&D. This would require major investments much above the current government expense of 1.15 percent on healthcare. Our healthcare spend of less than 5 percent of the GDP is much below the acceptable international norms of 8-10 percent (more than 18 percent in case of the US). We need to increase it to at least 2.5 percent immediately, private sector will invest the rest. Worst affected industries such as healthcare, aviation, retail, financials, realty and automobiles need incentives and financial support. We need to infuse liquidity in the markets and help reinvigorate demand and consumer spending.We must create an environment conducive to investments and growth in light of the ongoing trade war between the US and China. Many believe, the situation could change with the advent of Joe Biden. That would be eventually be dictated by realpolitik, let's wait and watch. In international relations, change is the only constant.India is presented with the historic opportunity of emerging as an alternate manufacturing & supply chain hub to China. But that is easier said than done. Bringing in strong economic& investment policies, compatible labour reforms, training of workforce in precision engineering & advanced technologies would be inescapable prerequisites.Resilient recovery both on the economic and healthcare front is most desirable in the larger interests of the nation, for which I am sanguine, all stakeholders are currently working with renewed vigour and vibrancy, if we have to capitalise on the unprecedented fleeting opportunities.
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