4/17/2020 FPJ EDIT: Economy needs a revival package

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Updated on : Thursday, April 16, 2020, 7:10 AM IST

By Editorial

Without a generous package for retail and wholesale businesses and various sectors of manufacturing, it may be hard to protect thesefrom the losses due to the severe disruption caused by the coronavirus.

ANALYSIS

FPJ EDIT: Economy needs a revival package

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4/17/2020 FPJ EDIT: Economy needs a revival package

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The Prime Minister’s address on Tuesday extending the lockdown till May 3 did not offer any new incentive for

the industrial and business sectors. While the extension was widely welcomed, there was disappointment that

PTI

4/17/2020 FPJ EDIT: Economy needs a revival package

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Modi failed to offer succour to the hard-hit small, medium and big businesses.

Without a generous package for retail and wholesale businesses and various sectors of manufacturing, it may be

hard to protect these from the losses due to the severe disruption caused by the coronavirus.

A task force formed a couple of weeks ago to consider a comprehensive economic package has as yet not come

up with its recommendations. Given that the extended lockdown is due to end early next month in most

geographies which are free from the virus, a timely help by way of tax concessions and/or other �nancial

incentives will help revive these labour-intensive sectors of the economy. Tax revenues are dependent on the

health of the economy which now needs a generous �nancial package to get back on its feet.

On Wednesday, the government lifted the lockdown for select sections of the economy, allowing e-commerce

companies, trucking of essential and non-essential goods, port and air cargo operations to resume functioning

from April 20. Factories in designated industrial sectors, too, will be allowed to work provided they take

abundant precautions regarding social distancing and house their workers in nearby premises.

In view of the harvest season for the standing rabi crops, farm sector has been given relaxations. Food

processing, mining, packaging, oil and gas and re�neries too will get back to work on April 20. Daily workers too

can go back to work on farms. All this will help a partial revival of the shutdown economy.

Meanwhile, all authoritative assessments of growth in the current �nancial year have vastly scaled it down. The

IMF reckons that the Indian economy will grow by a mere 1.9 per cent while the World Bank puts it a little higher

at 2.8 percent.

Given that the current crisis is building into the worst global recession since the 1930s depression, the IMF has

predicted a three per cent dip in the world domestic product.

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Some economies such as the US will contract more than others. Indeed, the Indian economy may be better

placed to absorb the disruption shock than most developed economies.

Even China is staring at a sharp drop in growth following the pandemic. Indeed, post-pandemic major national

economies would seriously consider reducing reliance on China for vital manufacturing goods and services.

Reordering of the global economic order due to the pandemic is inevitable. The onus is on the Indian economic

planners to make the best of the opportunity to grow its own manufacturing base.

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