Context:An analysis of impact of Covid in different sectors and especially destinies and migrants provides solutions to long-term consequences of pandemic.
Impact of COVID:
GDP decline: GDP at the end of FY21 would be 1.5-2% and even more if the lockdown continues further.
Wage earners and business: Due to panic migration, low availability of workers and fall in business profits.
Centre-State Relations: Revitalised the wedge between centre and states, as seen in the case of deciding zones and relaxations.
Global Economy: Although FDI has been relaxed in many sectors, PM’s call for self-reliance defeats the purpose.
Failure in Centre’s strategies
Not enough fiscal stimulus: The real fiscal stimulus in the hands of the households is mere 1%
No short-term measures: Long-term development programmes, FDI in defence and space sectors doesn’t provide solutions for short term miseries.
Misuse of borrowings: In order to avoid charges of fiscal profligacy, government has gone for borrowings to make up for the revenue shortfall.
Way Forward: Balanced approach
Focus on short term: need to correct the serious adverse impact of the lockdown on wage earners and MSMEs, building healthcare etc.
Allow flexibility: Centre must allow states to localize solutions and shift fiscal resources to states.