Indian economy not comparable with normal situations, but can we really let them avoid responsibility this time?
The Indian economy has been left in shackles and all of us have been witnesses of it. While some blamed the advance of pandemic and others favored the government’s trial and error approach, all of us are collectively bearing the burden of job losses, dropped consumption, high inflation, and inefficient vaccination drive.
So, no matter if you’re team government or not, the plight would be shared. So, let us better put in place perspective and titillate facts to figure out if it is okay for the government to circumvent responsibility this time. All facts, no opinions.
Contraction in the first wave of the pandemic-
The first wave of the virus that hit the country was unprecedented, inadvertent, and difficult. And well, the impact of it was witnessed on the results that came up, with a heavy slump in consumption percentages and a large contraction in quarter numbers. But the thing is, when we talk in percentages, we fail to take into account the assessment of actual impact.
So, let me put that forward for you. Recall a little to the pre-Covid economy, where the unemployment rate was already high and the domestic product was already facing downwards. Now, when we say there was a large contraction experienced, it means that a hitherto bad condition was worsened, immensely. So, how do we run from the accountability of the situation that was already bad, without the political finger-pointing, obviously?
The stimulus package, 2020.
The economy really took a hit in 2020. This was a time when all the governments and their finance ministers were on their toes to stimulate the indian economy at a time when pro-free market individuals had taken a hard hit back home. Note that the keyword here is ‘Stimulus,’ by definition meaning to trigger, encourage and restore.
The task in question was, well, economy. However, the fiscal stimulus released by the government of India did everything but that. And it is because of the hefty numbers presented by the finance minister, the stimulators were actually hiding in a small corner. And oh, it’s not like the government did not have good examples to look up to because all major economies were in the same pit, and they were all throwing their ropes to find a way out. The rational thing to do would have been to look and assess the correct rope, but well, that’s exactly what the government did not do.
In contrast to the huge fiscal packages announced by other countries, the government of India boasted itself in saving precious fiscal resources, justifying it through people’s precautionary motives to save.
But that’s the thing about behavior- it is contingent on the situation. Had the government, like other economies, taken action steps to change the approach from precautionary motives to save, towards discretionary consumption, we would not have been in the pit we’re in, right now. Automatic stabilizers like unemployment insurance and unemployment benefits were nowhere to be seen, despite the double-digit unemployment rate.
The direct benefits were restrained to limited sectors, who did show improvement by the way, and the unorganized sector suffered a plight that is even painful to imagine.
The Budget, 2021.
Well, the country had all its hopes placed on the budget of this financial year. And it did cover a lot of aspects and dealt with a lot of problems, the concern with this was the important areas that it left completely untouched. One pivotal one of these includes the income inequalities and distributive aid, a section the government completely left out of action.
While the pandemic increased the inequalities at a disappointingly large scale, the lack of government response has led to the uneven economic recovery we’re witnessing right now. Major economies like China are examples of how income inequality affects growth and it’s time we learn something from our neighbors.
Another area that received a lot of criticisms from economists and experts is the health infrastructure sector, the budget allocation to which remained completely under the mark. Health economists termed this as an opportunity that went to waste, the impact of which we’re bearing now in the face of collapsing health infrastructure of the country and further shattered consumer confidence.
It has been time and again stated that during the time of emergencies, like the one we’re part of right now, a reliable public health infrastructural system works wonders in gaining consumer confidence, and well, the lack of it is deafening in the country. One of the reasons why our economy has suffered.
The vaccination drive
India’s vaccination drive is going to be the prime case study of how not to handle situations. Again, it’s not like we do not have precedents of successful inoculation drives in the past so the country had high hopes on it. However, this one was anything but a success, especially because the government failed to work on the basic rolling out steps for the drive.
The virus and vaccine misinfodemic that clouded the people’s judgment for a considerably long time was not talked about, even once, leading to inefficient demand and supply phenomenon for the vaccines. Improper planning, insufficient production, and inefficient management define the drastic situation we’re standing in today. As a result, we’re now witnessing prospects of a dangerous third wave, and the economic recovery, even after so much destruction, is contingent on the pace and presence of the vaccination drive.
The second wave
The lack of preparation, planning, and protocols brought us to the destruction we faced in the second wave, and I’m sorry but it does not get talked about enough. Other countries also faced a terrible second wave but none of them had their citizens dying on the roads due to lack of oxygen and beds. This is not just about livelihoods and politics anymore, this is about the loved ones that we lost because of a government’s irresponsibility.
And if we continue at this pace, the third wave that we’re looking at would also be as destructive, if not more. Because that’s what we do, right? Express remorse and pass judgments once the situation is over, but why can’t we, for once, properly plan things out in advance even when it is foreseen.
So, you tell me, when the government tells you to not compare the current situation with data of normal times, ask them if they did not have the ability to do better. Ask them if they did not make irreparable mistakes. Ask them to look at other countries and still tell us we can not compare the situation with that of normalcy. Because in these politics and blame games, the common men were the losers. So, you decide if the government can evade responsibility this time or not, but ensure that while you do so, you recall the image of the lost lives and shattered businesses in the back of your mind. Choose better.