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From this point, the buck stops with the Modi government, as the country trudges along the Covid highway. The political move to tap into the residual spirit of Indian federalism in our highly polarised polity helped so far, as the central government could inject into its decisions a look of national consensus. Whereas, the central government took all major decisions and most minor decisions.
However, the physical or material conditions vary from state to state while on the other hand, the time is approaching for the central government to make a thorny decision — when or how to restart the economy that was shut down almost overnight.
Clearly, an economy of India’s size won’t start back up simply because the government so decided. The refrain is that the restart will be gradual. But the devil lies in the details. Under what circumstances will businesses be allowed to reopen? It seems certain regions and businesses/industries may be put on a fast track. The MSME sector, which employs 12 crore workers need special attention.
However, defining a yardstick will be difficult because the economy is a complex web of supply chains and interlocking pieces with a dynamics of their own. In an interview with the BBC Radio last week, the owner of Mahindra & Mahindra said he just couldn’t see any possibility of his company becoming operational before May 2021, since, amongst other things, it doesn’t make sense to make cars without the numerous suppliers and sales outlets first reviving and, importantly, until consumer confidence revives.
Clearly, epidemiologists’ recommendations or the government’s decisions will not be the last word. If a manufacturer in Chennai depends on a part made in Ahmedabad, for example, where the virus is still spreading, a government fiat to start production becomes meaningless. Simply put, it is going to take much longer to thaw the economy than it took to freeze it.
Read full article...
COVID-19: Question of survivability of 1.4 billion Indians with no exit strategy
From this point, the buck stops with the Modi government, as the country trudges along the Covid highway. The political move to tap into the residual spirit of Indian federalism in our highly polarised polity helped so far, as the central government could inject into its decisions a look of national consensus. Whereas, the central government took all major decisions and most minor decisions.
However, the physical or material conditions vary from state to state while on the other hand, the time is approaching for the central government to make a thorny decision — when or how to restart the economy that was shut down almost overnight.
Clearly, an economy of India’s size won’t start back up simply because the government so decided. The refrain is that the restart will be gradual. But the devil lies in the details. Under what circumstances will businesses be allowed to reopen? It seems certain regions and businesses/industries may be put on a fast track. The MSME sector, which employs 12 crore workers need special attention.
However, defining a yardstick will be difficult because the economy is a complex web of supply chains and interlocking pieces with a dynamics of their own. In an interview with the BBC Radio last week, the owner of Mahindra & Mahindra said he just couldn’t see any possibility of his company becoming operational before May 2021, since, amongst other things, it doesn’t make sense to make cars without the numerous suppliers and sales outlets first reviving and, importantly, until consumer confidence revives.
Clearly, epidemiologists’ recommendations or the government’s decisions will not be the last word. If a manufacturer in Chennai depends on a part made in Ahmedabad, for example, where the virus is still spreading, a government fiat to start production becomes meaningless. Simply put, it is going to take much longer to thaw the economy than it took to freeze it.
Read full article...
COVID-19: Question of survivability of 1.4 billion Indians with no exit strategy
