Before the Covid-19 pandemic outbreak, India’s economic growth was indeed significant. India is hugely affected by the covid-19 outbreak. A report from Goldmann Sacchs suggests that the Indian GDP will take a hit by at least 5% in this fiscal year 2020-2021. This means tax collection will take a hit, further disarming the government to cut back on any support it could offer the civilians.
With the unexpected nation-wide lockdown implemented by the government, all businesses came to a halt thus leading to an economic crisis. Government’s reliance on the loan interest and income tax income only worsened the situation. That said, there are certain steps that the government has taken to alleviate this economic downturn. We absolutely love these measure among the others:
- Capitalising the Anti-China trend – Currently, the world nations are quite hostile towards China as it is considered to be the epicentre of the covid-19 outbreak. Some developed countries have even urged to carry out a probe on China regarding the issue, which of course China is trying to avoid vehemently. The United States of America is already in a trade war with China. This could mean only one thing, it’s time for India to capitalise the situation. With China out of the radar, India could be the next best destination for nations to turn to. And this can be a huge success with the support from the government and bigger corporate players in the market. With an established rapport and goodwill with various stronger countries, India is doing great in capitalising the Anti-China trend.
- Enhancing ease of doing business – The government did support the poor by doling to their needs. But how long could that happen? The only way to move forward is to support the small and medium scale industries. With the lockdown, all businesses did take a huge hit including their cash flow. To assist cope this situation, the Government of India introduced a new scheme of up to 20 lakh crore rupees of loans to small and medium scale companies. The main focus was to create more jobs and betterment of lives for people. Poverty-laden states like Bihar, Odisha, Rajasthan were highly benefitted through this scheme.
- Improving Agriculture sectors – When the businesses in the urban areas of the country came to a huge halt as a result of the lockdown announced towards the end of march 2020, the rural areas’ agriculture did not cease to operate. This exemption hugely helped the agriculture sector to maintain the supply chain and maintain their seasonal harvest. The state and central governments did procure a huge amount of staple crops as a part of their doling. This helped the agriculture sector to an extent. It is estimated that almost 300 million tonnes of agriculture items would have been harvested in India by the end of this fiscal year.
- Encouraging the e-commerce industry – During this unique pandemic situation which warrants social distancing, one of the best ways to achieve that is by encouraging e-commerce. People will have needs that have to be fulfilled, going to physical shops will not help the spread of the virus. Ecommerce can be highly beneficial for the economic growth at this point in time, despite the protest of some trader’s representative bodies like CAIT who think our foreign ecommerce players like Amazon and Flipkart would kill the local shop owners.
- Attracting FDI (Foreign Direct Investment) – India has been a hotspot for foreign direct investments for quite sometime now, thanks to the sitting government. Software, fuel, telecommunications are some of the industries that our foreign investors from countries like Japan, USA, UK, and the Netherlands are keen on. There has been a whopping 6 to 7% increase in the economic growth owing to FDI. Right now, Jio is our hotstar attracting huge investments from various parts of the world especially the Middle-East. This is going to have a huge impact on the economic growth of the nation undoubtedly.
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