Corona virus which originated from China is causing havoc all over the world and its direct impact on the economy along with people’s lives is quite evident. All economies, business are on a standstill. People are packed in their homes, poor struggling to meet their two ends, hospital flourishing with ill patients. At present, there is no hope as to when situation will normalise.
In such a situation, people are agonised with China. China, soon may lose its status of being the “famous manufacturing hub” as many manufactures are eager to leave china and set up their manufacturing base in India. Amidst the difficulties arising out of this epidemic, about 1000 foreign companies are in talks with government officials to set up their factories in India.
According to a report published in Business Today, at least 300 of these companies in mobile, electronics, medical devices, textiles and synthetic fabrics are actively in touch with the government to set up factories in India. On the other hand well-known economist Arvind Panagariya has said that it is possible that multinational companies will shift their operations from China in the wake of the Covid-19 epidemic, which India should take up and create long-term jobs in the formal sector. He urged the need of a proper plan and its appropriate implementation.
Time to think away, it is not right to waste the crisis in vain
Panagariya is a professor of economics at Columbia University. He stressed that the current crisis has exposed how vulnerable Indian workers are to any trauma. Panagariya said that Covid-19 pandemic is “time to think far”. He said “it would not be right to waste this crisis without squeezing any propitious or favourable opportunity out of it. The current crisis will end only after the vaccine becomes available. Surely we have to think ahead of that”.
India needs better paid formal sector jobs
He said, “Even after 70 years of efforts for development, we have given our workers mainly small farms (seven crores of them are on average less than one fourth hectare size) in the informal sector or small self-employed. Panagariya emphasized that the Covid-19 crisis has made it clear that India needs better-paying formal sector jobs and requires that workers move away from small farms and businesses to more productive and better-paying jobs.
He said that it is necessary that industrial and service activities should move from cottage industries to small, medium and large industries. This crisis seems to create an opportunity that multinational companies will move rapidly from China to other parts of the world. Panagariya said, “Multinationals will want to decentralize their activities more and more in the wake of the Corona epidemic.” India should not miss this opportunity. He said that during this crisis the government should pursue reforms in the field of land and labour markets, which are usually difficult to implement in normal times. He said that the Land Acquisition Act should be reformed. He said that in the same way more flexibility in labour markets is necessary.