The Financial Express

Economic recovery options  

| Updated: July 23, 2020 22:38:31

Economic recovery options   

Although the country is already over four and a half months into the Covid-19-inflicted crisis, those engaged in salvaging the lives and the livelihoods of the people badly impacted by the virus keep struggling on. Considering the scale of the damage and disruption the pandemic has caused to the economy, by practically eroding the informal sector as well as hitting the MSMEs hard thereby snatching job and income opportunities from a large chunk of the population, both public and private sectors leaders have been weighing up options for a turnaround. The exercise is basically to make the most of the resources at the nation's disposal for meeting the pandemic-related exigencies. But resource constraints stare in the face when one considers the paramount need for overhauling the healthcare system that has glaringly revealed its weaknesses. On top of this is salvaging the economy from a stupor it has sunk in so that it could bounce back within the shortest possible time. The dual challenge will have to be faced with extraordinary commitment and sagacity.

The issues that came up in a recently held on-line discussion included, among others, the need for creating a database on the evolving labour market situation to enable the government to formulate appropriate and time-bound policies on creation of employment opportunities as well as various kinds of technical and skill support bases for the labour force. Another issue of concern that merits due  attention is the fact that notwithstanding the MSMEs' well-acknowledged contribution to generation of the highest number of jobs in the economy, they, unlike the bigger business enterprises, face a lot of hurdles while trying to access the government's stimulus packages. That calls for the banks, through which the stimulus fund is being channelled to the pandemic-affected enterprises, to be more sensitive towards the need of the MSMEs. However, the government, in this case, has a greater role to play by freeing the stimulus money from the bureaucratic biases against the MSMEs as well as expediting its disbursement process so it can reach those in need without much delay. A desperate situation needs an equally responsive remedy guided by simplified and relaxed procedures of accessibility to credits by the small and medium enterprises.

Since the domestic demand has shrunk significantly as fallout from the shutdowns, the private sector has remained largely shy of investing. But the onus is on the government to stimulate the economy and generate jobs for the ever-growing numbers of the unemployed. Also, the lifeline the government has thrown to the vulnerable groups both in the rural and urban areas through its social safety-net schemes is required to be further extended to include those people who have been rendered vulnerable in the recent months due to the pandemic. But such mounting pressure on the limited government resources raises the question of how much it can mobilise on its own from its revenue earnings. Under the circumstances, the rich as well as the international development partners need to come forward and extend their support to the people in the hour of their greatest need.

However, the challenges of economic recovery in the pandemic and post-pandemic contexts warrant prudent use of the public and private resources  -- all the way going forward. The country can get back on an even keel when normality returns, the domestic and international consumer demands increase and the private sector feels encouraged to invest in the economy without inhibition.

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