Right Vision, Wrong Solution

Context: The recent policy decisions taken by the government amidst economy crisis are marred with challenges and need a pragmatic approach for their implementation

Critical Analysis of recent policy decisions:

• Call for Self-reliance: The PM noted that India should embrace the idea of “Make for World” to encourage local manufacturing hub.
• Positives: 

• India can become an important part of the global value chains.
• Pushes Medium to long term growth potential and create jobs at scale.

• Negatives:

• • • • The trade policy objective of cutting imports will not take India too far.
      • The threat of becoming a high-cost economy due to increased tariffs.

• Investment in Infrastructure: The PM has announced the National Infrastructure Pipeline worth Rs 110 trillion to Fastrack infrastructure projects.
• Positives: 

• Large investment in building and improving infrastructure will help augment growth

• Negatives:

• The burden on the States: The bulk of the investment is expected to come from the central and state governments
• The government investment in the infrastructure sector in recent years has not yielded the desired push to economic growth.
• Launch of National Digital Health Mission (NDHM): The idea is to give every citizen a health ID that will help maintain medical records and improve access to health care.
• Positives: 

• Will help India’s large base of migrants, who may not be in a position to maintain medical records over a period of time.

• Negatives:

• The absence of privacy law will complicate matters further.

Way Forward: Require Policy Pragmatism

• Increase Export without hurting Imports: Modern supply chains need a seamless movement of goods across borders.

• • • The government should to review the internal policy environment and align it with global needs.
• Review the investment plan: to prioritize the projects that could have a higher multiplier. 

Conclusion: The immediate challenge, however, is to contain the virus, which will obstruct any medium-term policy initiative.