Dr Gaurav Mittal
The long term goal of the present Government is to turn India into a five trillion dollar economy by 2024. Moreover, it is leaving no stone unturned to transform the Union territories of Jammu Kashmir and Ladakh created after the abrogation of Article 370 into Model Union territories.
The aim requires achieving an annual growth rate of atleast 12% and a great deal of foreign and outside investment to nurture the strained economy of the UTs of J&K and Ladakh. However, the reality is quite far from the expectations. Already the economy was strained due to restrictions imposed after the abrogation of Article 370. The main lifeline of the economy, the tourism and the hospitality sector is already under a lot of strain . Moreover, the removal of the Toll Plaza at Lakhanpur further added to the woes of the industry, particulary the Cement and the Iron Industry. This coupled with the news of the Yes bank Crisis triggered a fear amongst the people.
But as if the already built up troubles were not sufficient, the Corona scare has gripped the whole area and has totally destabilized the slightest revival to the core sectors of J&K economy. Tourism, Hospitality will be the worst hit sectors. The much talked about Investor’s Summit is in a limbo
In the Indian scenario, majority of the people are employed in the informal sector meaning that they are paid daily wages and no work no pay. The wages are just enough to help them feed themselves and their family. In such a scenario, the number of people who are being quarantined are basically being turned non productive during that period endangering not just them and their families survival but also having an overall impact on the economy.
The overall demand in the economy will witness a fall and in the strained condition as in Jnk it is bound to adversely effect the economy. Some fears are also being raised that the paper currency which passes through different hands may be an agent helping in the spread of corona virus.
In such a scenario, what are the policy initiatives that the Government must take to prevent a slowdown. There are two classes worst impacted, the Industrialists particularly the tourism and the hospitality sectors and the people at marginal levels of poverty whom the corona threatens to push deeper into the dungeons of poverty.
The main solutions that the Government can look to provide at this junction are:
* Announcing of a fiscal stimulus package, particularly for the sectors facing the most strain. Moreover measures to boost demand by putting more money into the hands of masses.
* To look for measures so that someone who is quarantined and saved from corona, he and his family do not die of hunger, meaning some sort of financial compensation particularly targeted at the people at marginal levels of poverty.
* To see that the precautions for avoiding corona do not become a false alarm against any economic activity. Particularly important will be to check the spread of fake news in this regard.
* To encourage the sectors like pharmaceuticals, alternative medicine which are experiencing a positive boom and which may help to stabilize the economy.
* To significantly promote e-commerce, e banking as a viable business models in the present scenario. It is amazing that online retail giants like Groffers, Big basket still have no business presence in J&K. Infact, J&K Bank, the biggest bank of the area is still not linked to the BHIM application.
These are some of the suggested measures that can limit the economic impact of the Corona. However it must be emphasized that no amount of economics can compensate a loss of human life and so the priority must be to contain and effectively fight the Corona.
(The author is Deputy Commissioner CGST, Jammu)
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