Blueprint For A Post-Pandemic Economy

Easing the aam aadmi’s distress, initiating revival of MSMEs and avoiding politically controversial agendas can take India forward

- R Seshasayee

God forbid, if you are ever wheeled into an ICU, you’d expect the doctors to focus on your survival first, and then your revival. Not on your workout regimen. Post the pandemic, whether the economy will be pushed to the ICU will depend on the duration and frequency of national shutdowns, and the state of the global economy. But damaged, it will be.

The Indian economy was weakening even before the pandemic struck the world. Yet, this is not comorbidity. The economy has always displayed remarkable resilience, and has the ability to face the challenge.

However, the economic blueprint for the country will need to be redrawn, at least for one or two years, with survival and revival taking precedence over expansion and growth. This is the time to strengthen the foundations of the economy, such as the banking and financial system, inflation, currency stability and capital productivity. Dreams of a double-digit growth can wait for another day.

There is a good case to establish a separate institution for economic revival, funded by long-term bonds floated in the global market. However, it is unlikely that there would be too much interest for such an issue, as most sovereign funds would be focussed on reviving their respective national economies, and private investors would be too shy to subscribe to long-duration debt.

Policymakers might wish to consider six pillars to support the new economic framework:

Focus on the aam aurat: The weakest link gives way, under stress. The aam aurat, who has been hit the worst from the impact of the pandemic, will now need to be moved to be the dead centre of our economic policies.