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Reviving GDP a Herculean task
The twin challenges of record rise in Covid cases, steep fall in economy will test Modi government's mettle
This may sound like a boring cliché. But we can't help it sometimes. That's what life is. And that's what life will be. Anyway, let's come to the cliché now. Time is the greatest healer. Isn't it? China reported its first case of novel coronavirus infection, now popular as Covid-19, in December 2019.
India saw first its Covid case surfacing on January 30 this year. If one goes by the first case in China where the deadly virus originated, humanity has been living with the virus for the past eight months. That's pretty longtime. And majority of the world's population is still safe which is great news indeed.
But I am not here to say that no one suffered due to the Chinese-born novel coronavirus and everybody is safe like a rock. Millions of people got infected around the world. Thousands of people fell prey to the global pandemic.
Scores of families are going through indescribable pain after losing their loved ones. Many more are in financial ruin and it may take several years for some of them to come out of the financial scar left by the pandemic. Impact of untimely loss of a family member is profound, immeasurable and immense.
In India alone, over 40 lakh people fell sick so far and nearly 70,000 people died. These are official numbers. The unofficial count will be much higher. That's sad indeed.
But we have fast learned fast to live with the deadly virus. More importantly, natural immunity that the humans embody has saved many of us. That had been the case whenever global pandemics attacked the planet. It's the same this time too in spite of path breaking advancements in the medical domain. Otherwise, it's practically not possible for our healthcare system to come to our rescue if everyone gets seriously infected.
However, we are not yet out of danger and Covid-19 threat still lurks around us. Our nation is witnessing over 86,000 new cases every day, the highest by any country. The day is not far off when India will turn into a nation with the highest number of Covid cases.
India is speeding towards second place now while the US leads the global Covid tally with nearly 64 lakh cases. However, to be safe, everyone needs to practice Covid-19 safety norms religiously until a safe vaccine is found. There is no other way.
However, it's no exaggeration to say that the indomitable, never-say-die spirit of humanity is on full display during this one-in-a-century pandemic. Gradual pick-up in economic activities around the world is a clear testimony. China where the ongoing global health crisis began its journey succeeded in putting its economy back on growth track (3.2 per cent GDP upswing during April-June this year).
Of course, the communist country deserves the backlash that it is getting from around the world for foisting the pandemic on the otherwise safe planet. But it also deserves accolades for containing the virus and reversing the economic slide at a faster pace. However, other countries are not so lucky. The US, the planet's sole superpower and the world's largest economy, is yet to come to terms with the pandemic and its economy is still in totters.
Further, the Indian economy is in a far bigger danger. This was amply reflected in the first quarter (April-June 2020) gross domestic product (GDP) data released recently. The economy contracted by a staggering 23.9 per cent during the three months when the country went through a total lockdown that crippled the economic activity.
From a positive growth of 5.2 per cent in the first quarter of last fiscal, the economy hit nadir in the same period this fiscal year. As IMF Chief Economist Gita Gopinath pointed out, India witnessed the highest contraction in the first quarter among the top 20 economies (G20) followed by the UK (-20.4 per cent). Moreover, labour intensive sectors like manufacturing (39.3 per cent fall) and construction (50.3 per cent decline) suffered the most. That means large-scale job losses.
But the economic pain that Indians has gone through is much bigger. The Q1FY21 numbers will be far worse when data from privately-held small companies and informal sector pours in. Majority of Indians work in informal sectors, but the GDP data has not yet captured the true picture in that space.
It is very unlikely that India's economic woes end anytime soon as the country is facing twin challenges of steep rise in Covid cases and deep fall in economic activity. No other major economy or country in the world is facing such a grim situation.
The fact of the matter is that our economy has been on a downward spiral for the past eight quarters, falling from from a high of 8.2 per cent to 3.1 per cent growth in the final quarter of last financial year that ended on March 31 this year. Now, the GDP in deep red.
Further, Covid has spread its tentacles to hinterlands and healthcare-lacking rural areas. As a result, the agriculture sector which was the only silver lining during April-June period will also take a beating now. That means the economy will land in a much bigger trouble.
Therefore, it will be a Herculean task for the country to put the economy back on a steady recovery path. Pep talk can never replace the economic pain. The economy needs a better revival strategy. That way, the country's economic woes will test the Modi government's mettle.
Meanwhile, an interesting video involving an English news channel has gone viral recently. Maybe, it still is. During a debate on young Bollywood actor Sushant Singh Rajput's alleged suicide and the controversy that surrounded it, a panelist raised the issue of the economy's freefall. Incidentally, the first quarter GDP numbers were released on the day the debate took place.
Obviously, it was wrong on the part of the panelist to deviate from the core subject of the debate though undeniably, GDP is a far more serious issue. But anchors' behaviour is more reprehensible and disgusting. One of the two anchors went to the extent of saying that the panelist in question was wasting "nations' time" by raising the GDP issue! He shouted at him at the top of his voice, a regular feature in TV debates these days, and tried to paint him as a moron. Is discussing GDP on television a waste of time? That's as ridiculous as it gets.
Our nation is facing its biggest economic challenge after the Independence and it's the economy that matters the most to people in this country, not the sleazy deals and sordid tales of the filmdom. The anchors should have allowed willing panelists to make brief comments on the economy before moving on to the main subject. But such a ruckus over serious issue like GDP has not only showed the anchors and the media outlet that they represent in poor light, but also the entire media.
This incident illustrates how fast some television anchors are turning insane these days. Hope better economic sense prevails on such anchors and we are spared of anarchy on the idiot box.