National Statistical Office revealed that India's GDP growth slumped 23.9% in the quarter ending June in the financial year 2020-21. The slump in the growth rate was attributed to the coronavirus pandemic and the consequent lockdown in the country to curb the spread of virus.
Several businesses amid the pandemic were forced to put on hold their operations which in turn lead to either shutting down of businesses or incurring enormous losses or both. Plight of migrant workers in something we have seen everyday.
And now, as the cases continue to surge in the country, daily wage earners, small businesses, migrant workers still face the brunt of the pandemic. All of this still affects the economy as a whole.
Chairman of Mahindra Group Anand Mahindra, however, remains optimistic about the economy's revival. He took to Twitter to reveal why he feels so and what can be done to give our economy a push towards revival.
In a series of tweet, the businessman says, "The situation would have been even worse without a bountiful monsoon, which has galvanised the rural economy. India is truly fortunate that a majority of its people live in rural areas. But clearly, Covid has done enormous damage to the urban & manufacturing sectors."
Mahindra adds, "The ‘unlocking’ will be like a tide going out which will, I fear, starkly highlight the deprivation of daily wage earners, independent service providers & small enterprises. Bank loan portfolios will be in a precarious state & their finances will need shoring up."
"A huge setback for a country that was successfully battling poverty. So we need a ‘whatever it takes’ approach to rejuvenating growth. Modern Monetary Theory (MMT) hasn’t traditionally been favoured because it supports substantial deficit financing & risks hyperinflation," he says.
The businessman added that banks and MSMEs need more support right now. "But there’s less risk of hyperinflation with paralysed consumption. We temporarily must jettison a fear of rating agencies. Need to support banks&they must support MSME’s. Need more stimulus for consumption esp. during the festive season. Livelihoods & lives are at stake."
Concluding his series of tweets, he says that he expects the economy to recover and all we need is a strong shove and we can get out economic boat sailing swiftly again. "To end with better news, a strong recovery seems highly possible, underpinned by rural revival of demand. Last month, our Tractor sales were robust & Auto sales also moved back into positive territory. A strong shove & we can get our economic boat sailing swiftly again."