Covid-19: Ways to Reboot the Indian Economy

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It will be hard to lockdown the country entirely for much longer periods…

A week ahead of the scheduled end of India’s 21-day lockdown, Former RBI governor Raghuram Rajan has suggested to the government to call people with proven expertise and capabilities, including from opposition parties, to deal with perhaps the greatest emergency being faced by the country since Independence following the coronavirus outbreak.

Rajan, a professor of finance at the University of Chicago Booth School of Business, suggested that India should now plan for what happens after the lockdown, if the virus is not defeated.

Laying out steps the country could take to recover from the economic effects of the COVID-19 outbreak, Rajan said the immediate priority is to suppress the spread of the pandemic through widespread testing, rigorous quarantines, and social distancing.

“It will be hard to lockdown the country entirely for much longer periods, so we should also be thinking of how we can restart certain activities in certain low infection regions with adequate precautions. Restarting requires better data on infection levels, as well as measures to protect workers returning to work, such as temperature checks of workers (though this will not catch non-symptomatic carriers), uncrowded transport, personal protection equipment, adequate distancing at work, as well as measures to identify and contain new infections”, Rajan said.

Healthy youngsters, lodged with appropriate distancing in hostels near the workplace, may be the ideal workers for restarting such activities, Rajan pointed out.

Several international agencies have cut in their growth estimates for India in recent days on concerns about the fallout of the COVID-19 outbreak.

According to Fitch Ratings, India may post a two-per cent GDP growth in 2020-21, the slowest since the economy was liberalised 30 years ago.

The Asian Development Bank (ADB) sees India’s economic growth slipping to four per cent in the current fiscal (April, 2020 to March, 2021), while S&P Global Ratings last week further slashed ..

Rajan affirmed that economically, India is probably facing its greatest emergency since Independence.

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