Everyone has been focusing on health-related problems that COVID-19 has caused but on the other hand, one big-time problem is our economy. We all have faced economic crises in 2007-2008, the great recession which was a severe worldwide economic crisis, and the 1991 crisis which India faced. We have learned a lot from it and we have either way which will make our country poverty-stricken or well to do.
So firstly economic growth is increasing in GDP (gross domestic product), which is the combined value of goods and services produced in a country. Many factors contribute to economic growth whereas recession is a fact of life that can be caused by external factors such as geopolitical and geo-financial events and as of now like the coronavirus.
We were already one of the worst-performing markets in the world. Before COVID a lot of damage was already done. India’s GDP has seen an inline decline after peaking out at 7.9 in Q4 of FY 2018 to 4.5 in Q2 of FY 2020. The industry was facing demand problems unemployment was at its peak and exports which were consistently down for several months. Also, if we look at the 10-year data for returns from the Indian stock market in dollar terms are shocking it is -3%.
“Center is working on a possible second stimulus package according to sources the stimulus may come in the form of staggered booster responses and the second financial package is expected to focus on a small and medium industry that has been hit by the pandemic.”
“Government may consider some of AMS sectors like an extension of GST payment wavier of water electricity bills.”
- Job creation: One of the biggest challenges in the economy is job creation. We require about a million jobs a month and increase net job creation and we are nowhere near that. Let us get more specific. India’s labor force participation of youth, ages 15-24 years, is some 26% while in other countries like China, it is 57%, Indonesia it is 47%, and Brazil is at 40%. On the other hand, if you look at employed women, India is at about 24%. Bangladesh is 36%. Malaysia is over 50%. Vietnam, a real example, is 73%. These are some worrying trends.
- The merger of schemes: To date, 905 schemes are run by the center and around 2500 by the state government. The center needs a merger of all its schemes and brings out only a few mega schemes which can be easily redeemed focusing on SOCIAL security and HEALTH security and as well as universal income transfer. Now is the time that we need big radical reforms.
- License permits: We need to stimulate the economy with deregulation that is providing license permits not only to the big companies but also to the small companies. We need to free these companies that much, that they pay their taxes on self-assessment. We need to open the market so they can start productions and provide employment. Speedy economic development requires even more successful startups.
- One rate one nation: We have nothing to lose now and for those people who say that government doesn’t have revenue, if we look at the figures we come across negative revenue from the GST last month. If we want the industry to be back on track this is the radical form. If it becomes so difficult we can keep aside petrol oil and diesel and this radical reform will act as a vitamin for our country.
- Introducing Competition: After the outbreak of COVID-19 is over our market is going to become a graveyard for many companies. We have seen companies in dept. This the time we need to introduce competition. We want survival of fittest, not the richest. As the companies die they will make way for big companies to attain monopoly. The government can make sure that the sector that has 4 companies or less there they increase competition. We have already seen in after 1991 with proper data that competition increases investment, employment, and good services. We need to change the focus from the big companies.
- Fiscal and monetary policy: While other countries are adopting these policies we need them too. Fiscal policy is the government’s competency of spending and taxation. When a country faces recession the policy says to increase spending and reduce taxes that will put money in the hand of people and encourage them to buy more goods and services. Monetary policy is to surge the money supply and decline interest rates. With less interest rate it is easier to borrow money that also encourages businessmen to expand their businesses. Nelson Mandela says “A leader is like a shepherd. He stays behind the flock, letting the most nimble go out ahead, whereupon the others follow, not realizing that all along they are being directed from behind.” That exactly what we need right now we need small companies to be the flock and the government should stop protecting the monopolies of the big companies.
- Agriculture sector: If we talk about agriculture The Reserve Bank Governor Shaktikanta Das stated on 27th march that agriculture on the back of all-times highs in the production and further on April 10 he remarked that pre-monsoon Kharif sowing had begun strongly, with acreage of paddy – the principal Kharif crop – up by 37 percent in comparison with the last season. Now the government just needs to take care of places where the farmers can supply their wheat and paddy.
- Pay taxes at the right time – Taxes are collected by the government, not for their benefit but for the entire country and its development. One should remember that when we pay tax we don’t waste our money we invest it for the benefit of the nation and we need to stop corruption.
- Educating the mass – We need to educate the people. Education is a must for a nation as educated people are more productive and efficient and contribute to the growth of an economy.
- Investing in startups – Investing in startups will bring new business ideas and think if it’s viable or no and if it is good enough to invest in them, this will help to create jobs for the country and give the great potential to grow.
- Buy Indian products – Try to purchase our home-made products and brands which will help these companies grow and significantly the overall scenario of the Indian company’s increases and lay steps for the development of our nation.
- Giving the weaker sections a chance to grow and progress – the population of poor people in our country is much more than the rich also the rich are becoming more rich and powerful whereas the poor lot is left on their own. One should realize that economy won’t progress if we entirely ignore these poor people, we should come out with a way to give them a chance.
- Don’t seize your money: We need to keep our money circulating because even one rupee spent is creating value somewhere else let us take an example of gold, firstly we import 27% of gold. Buying gold unnecessarily and keeping them in your locker stops the money circulation and also increases import.
- Eliminate religious friction – For years now are separated by caste and creed. This feeling among Indian people affects our economy. We need to get that we are one and together if we stand we can easily fight this war.
- Donate – Donating and helping people with a social cause even a small amount and only if a quarter of us start to donate will have a great impact and with efforts, we will start to eliminate poverty.
We can take a long jump. Our radical reforms are a bit week but our government is good at grabbing opportunities with the great support we just need the right time. Also in the long term, our demographics are pretty decent. We have a working-age population coming in. We have good coastline, so our geography is pretty good, though our population density is high on the hand.
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