Here’s How the PM Plans to Tackle the COVID-19 Economic Crisis

The PM laid emphasis on being ‘self-reliant’ as a nation.

(Photo: The Quint)

PM Modi in his address to the nation on Tuesday, 12 May, said in order to save the crippling economy amid the lockdown, the government has released a Rs 20 lakh crore package called ‘Atmanirbhar Bharat Abhiyan’.

He spoke of the impact of the coronavirus lockdown on the economy, particularly on poor labourers. The prime minister also hinted that post 18 May, the measures taken will be nothing like the lockdowns that have happened so far.

The Package Isn’t New

The PM has made it clear that this isn’t an entirely new package, it includes the earlier provisions mentioned by Finance Minister Nirmala Sitharaman. This includes free food grains for the poor, and cash transfer to JanDhan accounts.

The RBI too, had announced that NBFC, NABARD and SIDBI will be given a special liquidity facility. The PM said that there will some kind of provision for everyone in the package and related announcements will be made on 13 May by the finance minister.

What remains to be seen is how the government will deal with such a massive package, when the government’s funds have been slowly drying up, and RBI reserves had to be used.

But an announcement like this was extremely necessary. While certain businesses have been allowed to restart operations, most of them are not in a position to pay their employees, particularly small businesses.

They had been asked to continue to pay salaries, even when there was no income. Ten conditions had been laid out for people to reopen factories and each condition required expenditure. If the government is going to do something concrete to help them, it will really give a boost to the industry and the economy.

What Happens in Lockdown 4.0?

The PM said in his address that not only will we now fight coronavirus, but will also grow. The message is clear that the government has realised that a complete lockdown will not work anymore, and that the economy has to be furthered.

The number of coronavirus cases have been rising, and soon they will race ahead of China’s tally of cases. The lockdown doesn’t seem to benefitting us entirely, and it’s becoming difficult to arrange for basic food and water for the massive population of the country. The lockdown may continue post 18 May as decided by respective state governments, but with several conditions eased.

‘Be Vocal For The Local’

One of the significant things that the PM said in this speech was for us to be ‘self-reliant’, and this is something a lot of other countries may not like.

It’s going to be difficult to implement this however, since the world is a global village. Consumers will buy whatever is the cheapest and the best, and the countries that have shut out their economy have only suffered. The US is a prime example of that.

Also companies that have been producing local products have been in bad shape. This is because the costs of production amid the lockdown are very high, and also there is very little demand. The spending power for most people is very low right now, and hopefully the economic package should be able to aid that.

‘5 Pillars of India’s Self-Reliance’

1. Economy: An economy that takes quantum jumps and not incremental change

2. Infrastructure: Infrastructure that should be world-class and becomes the identity of India, and one that is synonymous with modern India.

4. Demography: A vibrant demography, that becomes a critical resource for a self-reliant India.

5. Intelligence-driven supply system: The PM emphasises on strengthening the stakeholders in the supply chain, so that an increase in demand can be fulfilled.

The roadmap created by the government is definitely essential, because all these pillars are in bad shape. Everyone from the migrant worker to his/her employer are facing issues. Prior to the coronavirus pandemic, the rate of demand in the economy had been falling, and that has only worsened. While it’s good that the top leaders have taken cognisance to this, it needs to filter into the ground reality.

Poor Labourers Addressed

In his previous address, the PM urged citizens to help the poor. But in this address, he said the government will do their best to help them. He mentioned not only the migrant workers, but also the hawkers, the street vendors.

But this announcement has come with a delay, and there still isn’t clarity on who will get what. The poor in the country are in a terrible state, with not enough for two square meals a day. The only hope now is that in Nirmala Sitharaman’s announcements there will be some concrete provision for them.

While earlier, the government promised food grains for all the poor people in the country, it did not reach everyone. Even increasing the wages through MNREGA was of no use really, when there’s no work happening.

Ease Of Doing, To Increase?

In his address PM Modi spoke of not monetary and financial policy, but also about labour, liquidity, laws.

“We will not bend, or get tired or get defeated,” said the PM in his address, motivating the nation. The policies announced by Nirmala Sitharaman in the coming days however, will determine whether this spirit can be maintained, and if the economy will really get a push.