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Editorial Analysis: A multisector road map for recovery

A multisector road map for recovery

Approx Read Time: 7 minutes
A multisector road map for recovery
A multisector road map for recovery

Steps taken for economic recovery in light of Covid:

  • The government and the Reserve Bank of India (RBI) have initiated many activities for economic recovery.
  • A proactive action plan is needed for growth to bounce back to 6-7% in 2021-22.
  • Economists have predicted a major decline in all economies, except India and China, where growth will dip, but may not contract.
  • As Germany and Japan displayed willpower and determination after World War II, we can overcome the impact of the coronavirus disease (Covid-19) if we pull together nationally, as a team.

10 major reforms which will pay off for the economy:

  1. Usher in the next green revolution:
    • While the green revolution in the 1960s resulted in massive productivity enhancement, India still ranks 103 of 119 countries on the Global Hunger Index.
    • Hence, we must enhance farm productivity and introduce more automation in agriculture.
    • Boosting the agricultural processing industry with integrated cold chain, streamlining logistics and building mega food parks will lead to the stated goal of doubling farm incomes.
  2. Set up smart villages with essential services:
    • This will involve modernizing over 600,000 villages, and it can transform the lives of at least 500 million citizens. It will also decongest cities.
    • Essential services that are required in villages include pucca housing, all-weather roads, 100% electrification, potable water, broadband infrastructure, schools, health centres etc..
  3. Set up more special economic zones (SEZs):
    • Following the government’s announcement of lower taxes for new units, and an attractive Make in India policy for the electronics sector, all other sectors need aggressive manufacturing policies to build a supply chain base which is not dependent on China.
    • India is a far superior choice over the smaller Asian countries due to its huge domestic market that needs to be served first.
    • This can be achieved by upgrading the present SEZs and establishing new SEZs similar to Shenzhen and Pudong in China to make them large employment enclaves.
    • Power and logistics will have to be regionally competitive.
  4. Upgrading education:
    • Schools and undergraduate education must be upgraded.
    • Many children still do not have access to higher secondary education and universities, especially girls.
    • We need much more investment in middle, higher secondary schools and undergraduate universities, with future-oriented and digital curriculums.
  5. Invest in modern health care infrastructure:
    • India ranks 145th globally as per the health care access and quality index, 2018, with low capacity:
      1. India has a single State-run hospital for every 55,591 people, a deficit of 500,000 doctors;
      2. We only have 0.55 beds per 1,000 people.
    • After the gaps in India’s health care system have been laid bare by Covid-19, we cannot delay vital infrastructure investment any longer.
    • Also, telemedicine services must be boosted.
  6. Superior technology development:
    • India is lagging and must focus on research and development.
    • The government has taken steps like:
      1. Allocation of Rs 8,000 crore under the National Mission on Quantum Technologies;
      2. Launch of a digital platform to facilitate the application of intellectual property rights;
      3. Setting up knowledge translation clusters for diverse technology sectors;
      4. Providing Rs 6,000 crore for BharatNet to link 100,000 gram panchayats;
      5. Together, with the private sector, the government must push ahead with the 2030 national technology agenda.
  7. Ensure a big thrust in infrastructure development:
    • The next decade will see investments in infrastructure such as roads, bridges, ports, airports and metros.
    • The government has already made a budgetary allocation of Rs 102,000 crores for the next five years.
  8. More foreign investment:
    • More sectors should be open to 51%-100% foreign direct investment (FDI).
    • India has a huge requirement for international capital, and there is considerable liquidity with many global sovereign funds.
    • There are many sectors where foreign investment is allowed only up to 49%. This needs to be enhanced to 74% or even 100%.
    • Also, we have to provide a red carpet for foreign investors by setting up single-window clearance facilities in the states and Centre.
    • The focus should be on renewable energy, storage, biotech, electric vehicles, artificial intelligence and cybersecurity.
  9. Globalize national champions:
    • We should assist large Indian companies to grow into large global multinational corporations (MNCs).
    • Companies and industrial houses in the private sector and public sector should be supported to upscale globally.
  10. Showcase industry leadership role models:
    • We should nominate top leaders from the government, MNCs, large domestic companies and startups, to promote key qualities of entrepreneurship, planning, rapid execution etc aimed at international success.
    • This way, young engineers and managers who are the leaders of the future will be inspired.

Conclusion:

  • The best is yet to come for the Indian economy.
  • We just need to prioritize new investments in key sectors for the creation of millions of jobs to achieve the target of becoming a $5-trillion economy.

Also Read: Economic Bytes: First dose is liquidity; MSMEs get mega guarantee

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