Reversing the economic reversal -Pulapre Balakrishnan
Don’t bank on V-shaped recovery. The Centre must discard dogmas, enhance investment
News of a contraction of almost 24% of the gross domestic product (GDP) in the first quarter of this year would have come as a shock to every responsible citizen. The degree of contraction exceeds that in any major world economy. This is not surprising as India combined the world’s most stringent lockdown with the weakest economic stimulus.
For perspective, the actual fiscal impulse has amounted to less than 2% of (2019) GDP while it has been close to 10% in the United States (US). The difference finds its reflection in the relative rates of contraction, with GDP in the US contracting by 9% in the April-June quarter compared to two-and-a-half times that in India. There is no doubt that we are observing something that will have a deep and lasting impact on the economy unless the government responds to this news with decisive and quick action. Above all, a functional economic policy is what is needed now, rather than one that is attractive to the government for reasons either ideological or aesthetic.
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Hindustan Times, 7 September, 2020, https://www.hindustantimes.com/analysis/reversing-the-economic-reversal/story-QkFtUhttB9pVWUzprycfiN.html?fbclid=IwAR0EnTfkwW1j7Uw4pIw_UocPAEjyfTD9RbCGt2ZONUpz3gkySLF0HmvzPdk