IIHMR organises panel discussion on ‘Effect of COVID-19 on Indian Economy: Policy and Programmatic Implications’

The panel discussion was attended by 722 participants

As Health is one of the most important pillars of sustainable development; therefore India needs to spend more on healthcare infrastructure. As a public health strategist, Dr David Bishai, Professor, Bloomberg School of Public Health, John Hopkins University suggested focussing on the health needs for poor who was speaking at the panel discussion organised by, Indian Institute of Health Management and Research (IIHMR), Jaipur on ‘Effect of COVID-19 on Indian Economy: Policy and Programmatic Implications’ which was attended by 722 participants.

He further raised a concern that the COVID-19 outbreak won’t end until 60-70 per cent of the human population is immune to the virus, which may take between 18 and 24 months to develop a vaccine for it. If vaccine is not developed in next two years, it will impact Indian economy dramatically, particularly the health sector because there will be less money and the human resource available to run the existing programmes will not be enough. Immediate need is to recover small business post COVID-19 by ensuring that the credits should reach them regularly by banks so that employment can be created.”

The panel of experts at the 9th webinar organised by IIHMR, Jaipur, included Dr Narain Sinha, Professor, University of Botswana, Ujwal Thakar, Ex-CEO, Pratham India, Board Member-Educate India, Tamal Bandyopadyay, Author, and Consulting Editor, Business Standard, Hema Krishnamurthy, FCA- Practising Chartered Accountant, Consultant, MSME, Visiting Faculty – IIM,  PR Sodani, Pro President, Dean IIHMR & Dean Training, IIHMR University, Monika Chaudhary, Faculty- Health Economics & Financing, IIHMR University, Jaipur.

Dr Sinha shared insights about Indian Economy before COVD-19, the present situation, and the economy after COVD-19. His absolute focus was on the issue of migrant labourers as they are most important for Indian economy. During lockdown, 92.5 per cent of labourers have lost 1-4 weeks of their work. About 95 per cent workers get wages below minimum wage rate. The contribution of MSME in Indian GDP is 28 per cent and this sector is highly affected by the lockdown. Sectors like real estate, mining and quarrying, construction, aviation are highly impacted due to COVID-19 between April and June 2020. He also said that during nationwide lockdown, there was a demand of labour, there is a supply of labour but there was no connection between them. Therefore Government should make immediate policies according to local demographic, social and economic fabric.

Thakar said, “Strengthening of democracy is the biggest solution to the economy.COVID-19 has forced the entire system to think about the biggest disaster i.e poverty. The tragedy that has made us realise that a very large section of daily wage earners in the country became very vulnerable in the wake of the pandemic. We need to focus on migrant labourers that they get immediate employment in their own villages which could help in boosting rural economy and sustainable livelihoods for poor. For this Government should connect with NGO’S who are working for the upliftment of the villages in India, get ideas from them, and involve them for successful execution.”

Bandoyapadhyay added, “Government and RBI should come up with monetary solution to decrease the fiscal deficit. The Rs 1.7 trillion relief package for the poor, announced by the government is quite far from reality. The money transferred to Jan Dhan accounts and food and ration provided to daily wage earners is not enough for their survival. Government and banks are adopting conservative approach towards spending money during this crisis. If Government and RBI would not come up with monetary solution, fiscal deficit will certainly go up post COVID-19 as this crisis is different from what we have observed in 2008.”

Krishnamurthy stated, “Large organisations should include MSME in their purview only then MSME will do the same to their labourers as she highlighted the impact of COVID-19 on MSME sector. She said MSME has huge dependency on new customers as they have small customer base. Medium enterprises, which have created more than 90 per cent of jobs in India, employing over 114 million people and contributing 30 per cent of the GDP, this sector is important for India, not only because it generates the largest number of jobs, but also because this sector, saves us from having a lopsided growth model; therefore inclusive behaviour has to be incorporated in business rather than cut throat competitions. Fair play and fair returns for all people in value chain has to be ensured, and should focus on having cash rather than profits through quick collection periods even when the margins are low. The major challenge for MSME is to withstand and sustain in business, inspite of losses incurred, mounted payables and lack of working capital.”

Dr Sodani said, “The magnitude of the economic impact will depend upon the duration and severity of the health crisis, the length of the lockdown, and the way the situation unfolds once the lockdown is lifted. Amid uncertainty as to when the situation will normalise, a sharp downturn is expected in various indicators of the manufacturing and services sectors. The high impact sectors in terms of risk on account of COVID-19 are aviation, hotels, restaurants, jewellery, retail, shipping, non-essential items; exports; and supporting sectors like electricity, and port services.”

Dr Chaudhary mentioned, “The impact of lockdown on the social sector, concerning daily wage workers and poor and vulnerable sections of the society has been immense. It is undoubtedly the need of the hour to prepare for a future that is sustainable, structurally more viable for living and working.”