CRISIL’s latest report indicates that the Indian economy would have to grow by 11 per cent for three consecutive years to match the economic growth pre-COVID19!
In other words, we are not coming back to the economic growth levels of 5 per cent prevalent from 2019-20 to 2024-25 at the earliest. May I remind you that economic growth during 2019-20 was tardy and the Finance Minister, just three months ago, had announced the National Infrastructure Pipeline (NIP) of Rs.102 trillion to kickstart the economy. Your magazine had recommended a set of measures for the relief package to the Finance Ministry, from which a few suggestions were adopted in the package announced – but the critical ones were not given due consideration.
At our webinar titled ‘Will PM Modi’s Economic Package Revive Indian Businesses’, with panellists including Vinayak Chatterjee, Chairman, Feedback Infrastructure; Harshvardhan Neotia, Chairman, Ambuja Neotia Group; Madan Sabnavis, Chief Economist, CARE Ratings; and Pradeep Singh, Former Advisor-Infrastructure, Government of Jammu & Kashmir, we conducted a poll, inviting over 1,000 registered attendees to select one among five options as the most critical measure of relief they were seeking.
The options were:
Loan without collateralLoan with extremely low interestReimbursement of salaries and wages payable to staff and workers earning below Rs.20,000 per month for three to six monthsReturn of money to be received from government taxes/refunds/PSUsAvailability of labour
The fifth option was the most preferred, followed by the third option, which would give businesses direct cash relief in paying wages and salaries of their employees for three to six months. Several countries have provided this kind of relief as it ensures that employees get to keep their jobs while easing the burden on the employer. Availability of labour has been a self-created blunder that has hurt our country’s ability to get back to work. Economies in Europe are getting back to work with even restaurants and movie theatres being opened. China is already at its near normal capacity of work. But an inadequately planned lockdown with scant eye on details of the consequences has done us in. This has resulted in nearly 2.5 million migrant labourers returning to the state of Uttar Pradesh alone, of which 75 per cent are from Maharashtra. In total, 9.1 million migrants have been transported by trains and road transport during May! Several more have walked their way home. The entire ‘Make in India’ workforce has been disrupted, adding to the losses of businesses that were ready to commence operations.
The ‘Atmanirbhar’ package, too, did not address the immediate fiscal needs of businesses but chose to address long-pending reforms. While this was a welcome move, some reforms were just being restated collectively and were not new. Besides, the PM’s claim that the package would infuse 10 per cent of GDP into the economy seemed hollow as the fiscal interventions were not over 1.5 per cent of the GDP. This has been an example of a well-intentioned but badly carried out exercise in communication and has created a sense of disbelief in the intention itself.
The need for the country to lift the lockdown is emanating from a sense of insecurity that the government does not have any plan in any case. It needs to step up spending as proposed in the NIP with greater fervour. Only aggressive spending on the NIP can revive the economy.
During these unprecedented times, CONSTRUCTION WORLD has been conducting live and free webinars online to keep readers and subscribers informed. Our editorial, digital and production teams have been actively getting information and news with interviews from those at the scene of action and producing capsules to keep India informed. We have also proposed several interventions to the government during this crisis. So far, we have conducted 16 webinars, which have been viewed by 30,000 people and over 10,000 companies over the past two months. These webinars have included updates on roads, metro-rail, ports, NIP, architecture, building safety, industrial safety and MSMEs, among others. You can view the recordings on our website at www.constructionworld.in/webinar