Coronavirus – Economic Issues

We must aspire for nurturing economy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Paper 3- Issues of inclusive growth

The sight of thousands of migrant workers walking thousands of kms back home after lockdown has been the watershed moment for the collective conscience of our country. This made us think about the present economic model and policies we have been adopting. So, the answer to the problems created by the present model lies in building “nurturing economy”. What is nurturing economy? Read to know…

Broadly, we can summarise the impact of pandemic as-

  • Unemployment is shooting up.
  • Supply chains of food and essentials have been disrupted.
  • Dark clouds of economic recession are on the horizon.

Invisible cost of pandemic

  • The visible cost of the pandemic in terms of the lives lost are being counted by the day.
  • But the invisible cost of hunger and impoverishment of the most vulnerable sections is yet to be effectively addressed.
  • Vulnerable section- our workers, the poor and the migrants, particularly women, are at receiving end of these invisible cost.

Health of economy before pandemic

  • The pandemic came at one of the worst possible times.
  • India’s economy has been in deep trouble since 2016.
  • In 2019-20, even before the pandemic happened, our GDP growth had dropped to 4.2 per cent, lowest growth seen in the last 11 years.
  • Even the oil prices dropped at their historic low.
  • Non-food bank credit is a good indicator of overall economic robustness.
  • By December 2019, the growth of non-food bank credit had dropped to below 7 per cent. ( lowest in the last 50 years.)

What happened to economy after the pandemic?

  • After the pandemic arrived, matters, of course, got worse.
  • In March, $16 billion of foreign capital exited the country, which is an all-time record for India.
  • India’s unemployment rate shot up to a record high of 23.8 per cent in April.
  • In the same month, Indian exports dropped by 60 per cent.
  • This was one of the biggest drops seen in any emerging market economy in the world.
  • There is a genuine risk that this year our growth will drop to an all-time low, beating the record plunge of 1979-80.

So, the pandemic has forced us to think about the building a nurturing economy, one in which Gandhiji’s Talisman is followed in word and spirit, one in which John Rawls ideas are implemented.

So, What building a nurturing economy involves?

  • Our economic and political policies must not be ends in themselves.
  • Instead, these policies should involve instruments for building a society that is secular, inclusive and nurturing.
  • It should be a society where people of all religions, caste, race and gender feel wanted and at home.
  • Environment sustainability and focus on green economy is also part of nurturing economy.
  • We should strive to create a society that respects knowledge, science and technology, and culture.

Threefold crisis emerging out of our exploitative behaviours

  • The outcome of our exploitative behaviour is a threefold crisis which describes India’s current predicament.
  • 1) Rising poverty and unemployment despite abundance.
  • 2) Rising intolerance and violence.
  • 3) Environmental catastrophe.

Consider the question “Pandemic and the predicament of migrant labours has highlighted the lack of inclusive growth in our economy. And we must look for the solution to such shortcomings in our approach. In light of this, suggest the changes that our economy must embrace to ensure inclusive growth.”

Conclusion

Our ambition should not be to make India the richest nation in the world. India should be an example of an equitable society, where people are not abandoned without income and work, where no one feels the insecurity of being a minority, and of being discriminated against.

Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments