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A big push is required to bring the Indian economy back on the rails. Like other nations of the world, India too has been badly affected by the corona pandemic and its economy has virtually come to a halt. Thus, various rating agencies have predicted almost 10 per cent shrink in the country’s GDP in the ongoing fiscal year. If that really happens, Indian economy will have to make a fresh beginning.
It is heartening to note that the Reserve Bank of India (RBI) has already taken measures to revitalise the economy. RBI has given permission to commercial banks to go for one-time restructuring of corporate and retail loans. This is not only a step to the right direction, but will also help in restarting economic activities in earnest. Restructuring of loans will ease financial burdens of corporate and small traders. Apart from repaying the loans, now they will also be able to focus on the future. Ambitious plans that seemed to be lost due to pandemic, will resurface once again. At the same time, it will be a suitable answer to the liquidity problem too.
Another salient feature of the restructuring plan announced by RBI, is the thrust on micro, small and medium enterprise (MSME). MSME is very important for the survival of Indian economy. This sector contributes at least 30 per cent to the country’s GDP and engages over 11 crore people. Covid-19 has virtually stalled all the activities in this sector and the owners are now devoid of capital and the labourers have no jobs. With the repayment breather, MSMEs will now be able to function more freely since the outbreak of the pandemic. As the financial crunch is likely to be over, this sector hopefully will be full with activities and offer a fresh lease of life to Indian economy.
Just as one cannot build castles in the air, the economy of a nation cannot be strengthened by ignoring primary or secondary sectors. For a long period of time, the biggest contributor to India’s GDP was the service sector, which is not included in these two sectors. The contribution from agriculture and MSME sector to GDP was less than the service sector. Covid-19 has provided us an opportunity to set the focus right. Moreover, with various restrictions already being imposed and many more to come in the service sector, it is unlikely that the said sector will remain as generous to Indian economy as it was during the pre Covid-19 days. Already USA has restricted the numbers of H-1B visas. In the coming days, US administration is likely to put a curb on outsourcing as numbers of unemployed people have touched a high in the country. On the other hand, many European countries have put several travel restrictions, making it virtually impossible for outsiders to visit. So, it is time now to put stress on making the economy self-reliant. These two pillars of Indian economy will be developed in such a manner so that apart from fulfilling domestic requirements, we will be competitive enough to grab a share of the International market. This is the roadmap to revive Indian economy from the present slump.