Harsha Kakar
India is slowly flattening the curve of the Coronavirus. The national leadership is aware that increased lockdowns would only slow the spread of the virus, not stop it.While in some states the lockdown would persist for a while as there continues to be multiple hotspots, in most others it would be steadily lifted. Some industries have been permitted to open, while others would be given the green signal soon. Construction work along major corridors has commenced and so has harvesting. Markets would also commence opening slowly.
However, life would neither be normal nor carefree as remnants of the virus would remain, receding only with the introduction of the vaccine. Masks would be the order of the day along with social distancing. Major entertainment avenues including malls and cinema houses would witness limited visitors.Mass gatherings would remain suspended for some time. Public transport would commence operating slowly, and educational institutions would open post their summer break.
The economic damage to the country due to the lockdown has been immense and the economy should now be looking forward for a recovery. Closure of industry has impacted the labour market, most of whom have moved back to villages. Their return would be slow. Unemployment and non-payment of salaries by many MSMEs would add to misery of the working class.
Apart from essentials other businesses are unlikely to witnessnormalcy in sales for some time. The IMF forecasts Indian economy to grow at a modest 1.9% this year. India is amongst the two countries whom the IMF expects to have a positive outlook, the other being China.
The virus has led the government to reassess its policies and the population to review its priorities. The Government would have formulated its post-Coronavirus ‘restarting the economy’ strategy. There are certain lessons which the nation has learnt which should be foremost in consideration while crafting this strategy.
The first is that the country should reduce dependency on imports and move towards self-sufficiency. As was evident during this pandemic, in times of crisis, nations fight alone. The world paid heavily by creating the global logistics hub within China. As a lesson learnt, reducing dependency on China and shifting manufacturing units from there would form a part of each developed nation’s reconstruction programme.
Hence, multiple manufacturing units will leave China. Shifting of industry also implies transferring technology, which India should be ready to encash on. For India, it must have in place its strategy to open doors with lucrative benefits for these manufacturing units.India has been losing the battle for becoming a global manufacturing hub to Vietnam and other ASEAN nations which offer better tax and landsops, however, cannot match the size and power of Indian markets and the Indian middle class. India must plan now and have the right offers on the table.
It may lead to accepting reduced tax inflow for the short term to balance enhanced employment and increased inflow in the long term. In addition, the government should support own industry to re-establish and re-build.
The second is creating medical infrastructure. The Coronavirus pandemicmay be the first in recent times to have hit with such magnitude. It will not be the last. There may be multiple waves of the same or a modified virus striking the globe in the coming months or even years. National health infrastructure should be prepared to handle growing medical crisis. This includes creating production facilities for key medical necessities including ventilators and protective clothing. Alongside this should be investment in medical research into production of vaccines and medicines.
The Government must enhance investment in infrastructure development. It is developing infrastructure which will provide employment to mass rural population while enhancing connectivity across the country. In addition, the nation needs to devote funds for research on Artificial Intelligence and Robotics, which will guide future research and production.
With the pandemic impacting hundreds of thousands of Indian students studying globally, demands for education in India would be on the rise. Enhancing educational institutes and the standard of education is equally essential. Simultaneously, the Government should address the issue of quotas. Increased quotas compel capable students to rush abroad due to lack of open competitive seats. Millions of Indian students were forced to do so. The pandemic would reverse the flow. Students studying in India would work in India, adding to its capable work force.
The pandemic has enhanced Indian nationalism. This would manifest in Indians seeking to purchase more from local markets and Indian manufactured products rather than from known global ecommerce networks and imported goods. It would also change the tourism sector with the average Indian visiting domestic tourist destinations rather than global.
The defence sector is currently banking on imports for majority of its needs, despite some aspects being outsourced to the private sector. There is immense scope for indigenization and local production. Make in India should be the norm rather than the exception which is being followed currently.
The navy has moved into this with its internal design and development bureau. The air force is procuring Tejas in a big way, though key components of the aircraft are still being imported. The army’s design bureau has still to become effective. Thus, in future imports, the government must seek transfer of key technologies rather than offsets as part of its deals. However, the industry, mainly the DRDO should have the capability to absorb these technologies. This is the only approach which could change Indian military dependency in the years ahead.
While this may be the long-term aim, for the short term, orders must be placed within to enable domestic industry to rebound, rather than support global manufacturers. Supporting domestic R and D should be the order of the day. India possesses the technology and manufacturing ability, as was visible in the recently concluded defence expo, and it should be encouraged.
The Government strategy post Coronavirus must be put in place as early as possible and followed strictly. It should be all encompassing and cater far into the future than be just short-term and temporary. India must rise out of the virus stronger and more self-reliant than before. Lessons learnt from the virus must not be ignored.
The author is Major General (Retd)
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