Venkat Raman
Auckland, August 15, 2021
India marks its 75th Independence Day today
Prime Minister Narendra Modi: Effective measures to combat Covid and rescue the economy (PMO Picture)
Billions of people around the world will join people of India as they celebrate the 74th Anniversary (and 75th Freedom Day) of their Independence from alien rule and step into the Platinum Jubilee.
Their joy will relegate, at least for a while, the agony of the Covid-19 pandemic that continues to grip most countries, and greet the people of the world’s largest democracy, for their diligence, perseverance and steadfast belief in freedom and liberty.
Indians perhaps understand independence and appreciate its value better than anyone else in the world; for, it was obtained after protracted struggle and the right to express is constantly practiced, even on empty stomach.
Fighting forces of division
Such is the passion for individual liberty that for 74 years, the country and its people have constantly battled forces of division and derision, intransigence and indifference and violence and vituperation. They have done so with such scorn and contempt that people from other parts of the world (including those of Indian origin) are often baffled at the paradox and irony that form a part of the Indian psyche.
India has been a subject of debate and discussion since August 15, 1947 when the country gained freedom, for good and not so good reasons, for better or worse and in good faith and mistaken notion.
And in each of these debates and discussions, the ‘Indian element’ would be invariably conspicuous by its absence.
For, the Indian thought and action process is often an enigma to the outside world.
To a country of billion plus people, the day on which their leaders brought political freedom from alien rule, we say, “Congratulations! You richly deserved it.”
We have always believed that to be an Indian is unique and to be a New Zealander Indian is a privilege that is accorded to a chosen few.
World Bank on India
The world economy has suffered the adverse effects of Covid-19 and these have pervaded economies, communities and societies. International economists and planners believe that much of the world will traverse along negative areas of growth.
Against such odds, the Indian economy will be a source of inspiration.
The World Bank, in its May 2021 Report admitted that the Indian economy was negatively impacted by an unprecedented health crisis in 2020-20221 with the highly contagious Covid-19 spreading across the country.
In response to the pandemic, the federal government led by Narendra Modi took several proactive preventive and mitigating measures starting with progressive tightening of international travel, issue of advisories, setting up quarantine facilities, contact tracing of persons infected by the virus and various social distancing measures.
Although large gatherings- the Kumbh Mela, election rallies in several States and other undesirable movements- worsened the prevalence and spread of the pandemic, the country has shown its remarkable trait of resilience.
for the 75th Independence Day (Photo by Pallav Paliwal)
The World Bank acknowledged the steps taken by the Modi government including a strict 21 days nationwide lockdown, implementation of the provisions of the Disaster Management Act, 2005 and ramping up the health infrastructure.
“The real Gross Domestic Product (GDP) growth is projected to contract by 7.7% in 2020-21 as compared to a growth of 4.2% in 2019-20. GDP growth, however, is expected to rebound strongly in 2021-22 owing to the reform measures undertaken by the government,” it said.
Reduction in poverty
Since the 2000s, India has made remarkable progress in reducing absolute poverty. Between 2011 and 2015, more than 90 million people were lifted out of extreme poverty.
However, Covid-19 has reversed the course of poverty reduction, at least temporarily. The economic slowdown triggered by the outbreak is believed to have had a significant impact on poor and vulnerable households.
After March 25, 2020, when a national lockdown was implemented, economic activity slowed sharply. As a result, output fell by a whopping 25% (year on year) between April and June, the first quarter of the FY21 fiscal year.
The informal sector, where a majority of India’s labour force is employed, has been particularly affected. As in most countries, the pandemic has exacerbated vulnerabilities for traditionally excluded groups, such as youth, women, and migrants.
The World Bank report said that real GDP is estimated to have contracted by 8.5% in FY21 overall, but it has become positive again in the second half of the year. As growth resumes, poverty reduction is expected to return to its pre-pandemic trajectory.
“The response of the government to the Covid-19 outbreak has been swift and comprehensive. A national lockdown to contain the health emergency was complemented by a comprehensive policy package to mitigate the impact on the poorest households (through various social protection measures) as well as on small and medium enterprises (through enhanced liquidity and financial support).
“To build back better, it will be essential for India to stay focused on reducing inequality, even as it implements growth-oriented reforms to get the economy back on track. The World Bank is partnering with the government in this effort by helping strengthen policies, institutions, and investments to create a better future for the country and the people through green, resilient and inclusive development,” the report said.
Mumbai, the Mega City and Commercial Capital of India (Lonely Planet)
Economic Outlook
After growing at very high rates for years, India’s economy had already begun to slow down before the onset of the pandemic. Between FY17 and FY20, growth decelerated from 8.3% to 4%, with weaknesses in the financial sector compounded by a decline in the growth of private consumption.
The implementation of a national lockdown on March 24, 2020 (i.e. on the eve of the new FY21 fiscal year), brought economic activity to a halt, affecting both production and consumption. As a result, growth was negative in the first half of the fiscal year (April to September 2020) and only modestly positive in the second half. Over the entire FY21, India’s economy is estimated to have contracted by 8.5%. “
In response to the Covid-19 shock, the government and the Reserve Bank of India took several monetary and fiscal policy measures to support vulnerable firms and households, expand service delivery (with increased spending on health and social protection) and cushion the impact of the crisis on the economy. Thanks in part to these proactive measures, the economy is expected to rebound with a strong base effect materialising in FY22 and growth is expected to stabilise at around 6% to 6.5% thereafter,” it said.
Fostering NZ-India relations
Despite the existing and emerging challenges, the Indian economy is the fastest-growing in the world and is slated to maintain momentum in the foreseeable future. The country is an attractive destination for investors, multinationals, manufacturers, retailers and tourists. It is also increasingly becoming a popular country for higher education.
New Zealand and India have cordial political and bilateral relations and there are immense opportunities for businesses in both countries to engage in mutually rewarding relationships and lift the level of two-way trade, investment, education, tourism and a host of other activities.
