India & the Coronavirus: How to protect and rebuild the economy

As we approach May 3rd and the end of the second lockdown in India, and as the reported Covid-19 case-load and the number of daily new cases appear to be declining, attention is increasingly turning to the need for rapid action on the economy to protect livelihoods and enterprises, including the most vulnerable MSMEs that provide employment for the majority of India’s labour force. The Government announced a relief package for the poor of Rs 1.7 lakh crore on March 27, but much more has been eagerly awaited over the past month. Policymakers have the unenviable but critical task of making difficult choices on how much and where they are willing to spend. India’s fiscal situation was not great to start with, but is now under even more pressure with sharply declining revenues and with estimates of the additional pandemic-related expenditures as high as 5 percent of GDP or Rs 10 lakh crore, according to Arvind Subramanian and Devesh Kapur when they spoke at a recent NCAER webinar. Developments in financial markets in the past few days add further concern. With each passing day, the cost of an eventual recovery and the revival of large and small businesses is likely to rise, while urgent action and funding are needed to protect the most vulnerable whose livelihoods and lives have been deeply impacted by the Coronavirus and the lockdown.

On April 30, NCAER hosted the next in its Coronavirus Briefings webinar series to discuss how to protect and rebuild the Indian economy out of the deepest recession it will have fallen into in its history. The second in this series dealing with the Indian macro economy, the webinar was moderated by Shekhar Shah and featured four leading financial sector India Chief Economists—Neelkanth Mishra, Pranjul Bhandari, Samiran Chakraborty, and Devendra K Pant. The panelists also responded to write-in questions from webinar participants. The discussion was attended by over 100 participants