Coronavirus pandemic a bigger opportunity than a threat for India

THE PANIC & VIRUS THREAT For a 1.3 billion-people country, the virus-positive and death cases seemed too low to warrant a drastic action. Now with the lockdown, we reduce the risk to an even lower level, ensuring high probability of normal life after three weeks. Coincidentally, the crisis has come at a time when India’s economy was struggling in the midst of one of the worst slowdowns with gross domestic product growth at sub-5% per annum. In such times, a lockdown in a country where 700 million people live at subsistence-level (with very little savings to fend for their families for a month without income) will exacerbate the pains of slowing economy. Yet, the US with bold measures turned it into the biggest opportunity driving income and wealth of Americans to a new high through uninterrupted 11-year bull run in the US stock markets. In fact, with favourable demographics and oil prices, India has a lot better chance of rejuvenating the momentum in the economy. STIMULUS TO UNLEASH THE DESI ENTERPRISES The government and the Reserve Bank of India will have to act quickly before things aggravate economically - Work on tax cuts to revive demand, infuse liquidity, lower interest rates, forbearance to bank and non-bank lenders, allocate resources for direct benefit transfer to the bottom of pyramid, credit or credit guarantee to medium, small and micro enterprises, and public investment in infrastructure, etc. The opportunity will not be fully realised if the government does not unshackle domestic enterprises and harness their contribution to investment and employment generation as well. Our government needs to foster an environment of trust, ensuring their winnings will not be taxed or questioned unreasonably as their failures are not subsidised either. The crisis has come at a time when India’s economy was struggling in the midst of one of the worst slowdowns with gross domestic product growth at sub-5% per annum.