KICK START ECONOMY: POST LOCKDOWN

India is going through a very perilous economic condition.    Due to complete lockdown in the country for the past 45 days, the economic activities have come to a grinding halt.  However,  with the phased relaxations announced, the business has slowly started picking up.    But this  complete closure  has given a big jolt to the overall economy and as a result, unemployment has grown manifold.  The wheels of the manufacturing sector have stopped moving and the service industry has also received a severe jolt.    But India has always shown resilience to such adversity and in fact, its right time to convert this adversity into an  opportunity. 

Today a normal businessman is grappled with innumerable compliances.  The focus is more towards inspector raj rather than devoting the time in actual productivity.  A businessman has to constantly encounter with labor inspector, GST inspector, IT inspector, Vigilance, Pollution Control Inspector, Weight and Measure Inspector, Accounting compliances, Food and Drug Inspector and compliance with a  plethora of laws.    Every inspector/officer has his own whims without any accountability.  Productivity reduces considerably in such an environment and resultant low employment.  The government will have to do conscious efforts to remove such barriers. At least for the next 12 months let the industry function without any interference or such hindrances . The positive results will far outweigh the concessions so allowed.  Further, the     Government officials should also  be made accountable for each of their actions.    Use technology, minimize human intervention. 

Judicial accountability is another subject which successive governments have  failed to address.  There is no timeframe for deciding any case.  It starts from the lower court to close at the Supreme Court,  which takes years together to reach its finality.   By that time, either the litigant or the business itself is finished.   An Independent judiciary doesn’t mean no accountability.  Justice delayed is justice denied and as such the trust of the common man has been diminishing,  which ultimately gives rise to the corruption as one explores softer options to get the things done. 

The government should establish a single-window system in each city to help the industry to be known as ‘Udyog Mitra”.  An industrialist should find all answers through “Udyog Mitra”.  The suggestion should be in writing and binding.  No other department should question once the businessman acts as per the  advice received from such  Udyog Mitras.  

Though the government has given moratorium in the payment of interest on  bank loans, that is not enough.   The liability of payment remains while there is no income.  In other words, the liabilities are piling up when the demand is uncertain.  This will surely worsen the already deteriorated situation.  If interest waiver is not possible because of the negative impact on the economy, let it be deferred for a reasonably  longer period and there shouldn’t be  any compounding of such  interest.  Yes, Central Bank should find some ways to help banks so that depositors shouldn’t suffer.

Incentives play a major role in production and productivity.  The government should declare the policy of incentives like cash subsidy, relaxation in tax liability, providing cheaper land, helping in storage,  low interest rates  to those industries  who meet the targets of production and employment. 

The “AtamaNirbhar Bharat” policy of the government will be successful not by simply slogan writing,  but by being competitive.    If China supplies  at cheaper rates, then whatsoever we may say, our movement of “Make in India” will not be successful.  For example, if a person wants to buy TV and Indian make of similar quality  is costlier than that of China, majority of  the customer will go for Chinese  make,  regardless of his  patriotism.  To be competitive, don’t leave only on the entrepreneur, incubate and help him, give him support.  Only with the State help, China’s industry could grow to the extent of World domination.  The sinister policy of China on the spread of Coronavirus has isolated it from  rest of the world.  It is  high time that we  woo  investors and make India  a  world class  manufacturing hub.  Maharashtra, Gujarat and Tamil Nadu have always been fore-front in Industrialization.   The other States have a tremendous opportunity now and make concerted efforts to bring top-notch brands to make their State manufacturing capitals.

Infrastructure projects like road, power, hospitals, warehousing, cold storage, hospitals, schools, bridges, dams, railway lines, whose work came to a standstill in the wake of  the lockdown  should be given a booster dose.  This will provide large employment as well as high consumption of cement, steel and fuel.  This will provide the required lifeline to the other ancillary industries.

Real Estate is another industry that provides massive employment , but is  sadly  ignored by and large.   They have suffered very heavily due to the lockdown.  Projects have been further delayed.  Workforce has left the sites.  Bank defaults are there.  Real Estate industry is a consumer of cement, steel, fittings, furnishing and many allied products.  Concerted efforts should be made to revive this  industry.  Provide them moratorium in interest payment, tax payment, relief on delayed projects.  Case to  case study can be made through independent authority and efforts should be made to kick-start the stalled projects.   The courts are inundated with revenue matters.   Historically, the property registrar office is filled with corruption.    Throw away such a system.  If the passport office could be overhauled and become completely transparent, let property registration be also handled through the online system. 

Recently the government has announced a package of Rs. 20 lacs crores to revive the economy.  Now the government has to ensure that benefit reaches the needy immediately.  Corrupt practices should be dealt  with heavy hands.   Unless there is trust in the business community, and they are allowed to do business unimpeded, unemployment will keep on rising. 

There is a big migration of farm as well as other industrial workforce to their native places due to the closure of industry in urban centric places.  This idle labor force is now the biggest challenge to the government.  Without any productive employment, poverty will rise.  Concerted efforts will have to be made to relocate them where they can be gainfully employed.   A large workforce is concentrated in UP, Bihar and Rajasthan.  The affected States should help the industry and farm sector to bring them back to the work.   They must open help centers for these workers to disseminate the required information and facilitate their relocation at the respective work places.   Today, most of our labor force is equipped with SMART phones and with the use of   technology, they can be reached immediately and as per their skill, they should be immediately engaged.  All safety norms should be applied strictly so that we can fight pandemic as well.  

Pradeep Kumbhat

6.6.2020