New opportunities will have to be created to revive the country's growth engine.

(The current situation presents an opportunity to take bold steps to boost investment, protect existing jobs, and create new jobs.)

Priyanka Saurabh

Research Scholar in Political Science

Poetess, Independent journalist and columnist,

The Covid-19 epidemic has changed the global economy and has deep effects in India as well. The reduction in domestic demand due to the nationwide lockdown has caused the economy to shrink in the first quarter of 2020-21 and its effects are likely to be seen in the future. Nevertheless, Shri Narendra Modi has taken decisive and commendable action both from a health and economic point of view to reduce the outbreak of the virus. But the lack of coronavirus treatment worldwide has increased people's concerns. This sense of anxiety can create tremendous upheaval among people in India. As a result, it will affect our livelihood and the large economy.

On May 12, 2020, our Honorable Prime Minister Narendra Modi unveiled His Excellency Coronovirus incentive package worth a total of 20 lakh crores, which is around 10% of GDP, one of the largest relief schemes in the world. This incentive package can help revive businesses, which are becoming difficult due to a lack of money. India's 60,000-odd start-ups are facing an acute liquidity crunch. The current situation presents an opportunity to take bold steps to boost investment, protect existing jobs, and create new jobs.

Today, large business houses should be tried by the government to reopen through incentives or ease the purchase of raw materials or other goods and services, as this will increase consumer demand and boost the functioning of the vendor or ancillary industry. (Which has huge potential for employment generation). RBI should consider a single one-time window for the restructuring of trade credit, as required by all banks. There is an urgent need to reassure banks that their business decisions will not be questioned, thereby encouraging credit flow.

Interested in transferring manufacturing from China to India, the center can prepare a five-year plan on acquiring at least 60 percent of those companies. To make India a global trading hub, India needs to create an incentive regime for companies setting up global business operations. States should think about establishing self-contained "industrial cities" that determine the location for manufacturing, commercial, educational, residential, and social infrastructure. The 10 sectors identified by the government - electrical, pharmaceuticals, medical equipment, automotive, mining, electronics, heavy engineering, renewable energy, food processing, chemicals, and textiles fit into the Make in India campaign. Japan, America, and South Korea have already shown interest in these.

 Battery manufacturing (storage system) / solar panel manufacturing should be encouraged as part of re-imagining. The government may also consider promoting "deep tech" -leveraged businesses - blockchain, robotics, AI, machine learning, augmented reality, big data analytics, cybersecurity, and more. India ranks among the top start-up ecosystem globally. Start-ups not only help drive innovation but also create employment, which will be very important going forward. The government is required to provide significant support to the start-up ecosystem.

The auto industry which contributes significantly to GDP (around 9%), therefore deserves special treatment. In addition to reducing the GST rate, an old vehicle scrap policy can be formulated with tax incentives to create demand for new vehicles. Auto sales industry channel partners need to be recognized as MSMEs and encourage Indian expatriate direct investment in them, reducing the existing rate of 15% to 5% on a gross basis on dividends from foreign subsidiaries. This will lead to a higher inflow of funds and will be expected to support local projects. Foreign law firms and banks with domestic institutions may be invited to attend an off-shore center.

Much needs to be done to revive the growth engine of any country. At this critical juncture today, India needs a two-pronged strategy to successfully navigate the current crisis and recover strongly thereafter. First, reducing the damage caused by Covid and secondly clearing a path to recovery by taking advantage of new opportunities immediately. This strategy should be worked on immediately.

-- Priyanka Saurabh

Research Scholar in Political Science

Poetess, Independent journalist and columnist,