It is ironical that even as the world is grappling with the coronavirus challenge which has engulfed it ferociously, there is hope being fuelled by leaders like US President Donald Trump who nonchalantly claims that the worst is over and it is now time to think of a coronavirus-free world. As of Friday noon (India time) there were a whopping 4,500 deaths from the pandemic in the US in the preceding 24 hours, a record in terms of casualty figures for a single day.
India is averaging 1,000 cases a day in the last few days, despite a lockdown in major cities though total casualties are mercifully not in the same league as in US, Italy, Spain, UK and France, to mention a few. Indeed, India has been calibrating its response to the pandemic more prudently than most, but it is a long haul to a corona-free India.
The way the Tablighi Jamaat was able to converge on Delhi in huge numbers with many from abroad, and after the Nizamuddin congregation the manner in which they were able to spread themselves all over the country, infecting thousands in the process with the coronavirus has made our intelligence look vulnerable.
The problem of migrants itching to return to their homes in U.P., Bihar, West Bengal, among others, in the wake of cessation of work has exacerbated the floating population problem. All in all, it is a scary scenario with the economies of much of the world under severe strain. India is no exception as it grapples with the problems arising from the pandemic.
The employment situation is going from bad to worse and the economy as a whole is in dire straits. That amidst all this, the US has decided to stop all aid to the World Health Organisation (WHO) has made matters worse for the countries that were looking up to WHO for succour. With normal economic activity in India set to resume partially from April 20 and then hopefully wholly after May 3 across India, all eyes will be on the hopes of 1.3 billion people for a return to normalcy.
While the International Monetary Fund is projecting a growth rate of 1.9 per cent in India during 2019-20, better than most countries even at this abysmally low figure, there is greater optimism for the following year with growth expected to be upwards of 7 per cent. Indeed, hard times lie ahead but the blow can be softened with imaginative government policies and prudent monetary management by the Reserve Bank. A second economic stimulus is on the cards to kickstart the medium and small enterprises which are in a shamble.
This time it is not mere tinkering that would do the trick. The Government would need all its reserves of wisdom to get the economic revival on track. Mercifully, prices are not galloping though shortages are manifest. Rightly, the farm sector has been given props and more are in the offing. The oil import bill has been manageable with economic activity at a standstill and international prices depressed.
But, splurging on oil after the restoration of normal activity could prove costly for the country. There really is no escape from prudence in economic management. There is some comfort in the prediction that the monsoon would be normal this year. One can only hope that the God of rain would smile on India as predicted. The RBI announced measures on Friday to maintain adequate liquidity in the system, facilitate bank credit flow and ease financial stress.
These are welcome signs. Governor Shaktikanta Das said banks shall be exempted from making dividend payment in the light of financial difficulties posed by the pandemic. The central bank reduced the reverse repo rate by 25 basis points to 3.75 per cent in a move to encourage banks to lend to the productive sectors of the economy. Besides, Das announced a re-financing window of Rs 50,000 crore for financial institutions like Nabard, National Housing Bank and Sidbi.