Even though the center has imposed long-term repo operations and 2 billion swaps for six months, it is not compatible to stand stable in the aftermath of the global currency crisis. International Monetary Fund has described the period as the ‘Humanity’s darkest hour’ and has delineated its anxiousness that things are getting worse than the world financial crisis of 2008-09.
Being engaged in the Musolian mode of fascism, doing serfdom to corporates for enhancing fascist agendas, it is now the turn for the central government to have its prime attention on economic stabilization and upliftment of the entire community. It was Benito Musolini who defined fascism as a fusion of state and corporates. Last 6 years, the country was decisively accepting the way that the NDA-led government had disrupted the welfare outlook of an economy. As we are facing the ideal panic scenario of COVID-19, it will be better to analyze the possibilities of refocusing the government’s attention to economic stability than abounding in political agendas.
As the global economy is facing its gravest situation of supply chain crisis, it will simultaneously affect the amplification of the demand side of goods. Further, the US dollar crunch will also add more fuel to fire in the case of the Indian Economy, as its rupee is weakening at the record level. Even though the center has imposed long-term repo operations and 2 billion swaps for six months, it is not compatible to stand stable in the aftermath of the global currency crisis. International Monetary Fund has described the period as the ‘Humanity’s darkest hour’ and has delineated its anxiousness that things are getting worse than the world financial crisis of 2008-09. Asian Development Bank (ADB) has estimated a global loss of $4 trillion due to COVID-19 which is a historical benchmark. Moreover, the US-China trade war will also negatively disrupt the supply chain of India and it will add more problems in maintaining the private consumption of the nation. Indeed, these events will jolt the entire economic system and what in need is to have an analytical study of past and present ways of economic out looking of the nation.
After the financial crisis of 2008-09, India has still not able to overcome the balance sheet crisis of Banks. During the first stages of the Modi regime, the NPA (Non-performing Assets) was a matter of question. The then RBI governor had strictly warned the government to have necessary actions to handle the problem and has listed the name of more than 50 personals to have legal action. Despite negating this need, the government forwarded the demonetization, at a time where the country had an 8 percent growth in GDP. It flattened the GDP rate to 5.8, because of the severe liquidity crisis. Even though the country managed to tackle the short-term problems, it rolled out the GST at the same juncture. The GDP strike added more liquidity problems with the long-term results of demonetization. GDP again started to fall down to a historic mark of 4.5 in the last quarter.
It is vital to understand the measure of India in COVID-19 from its current economic status. Meanwhile, the center has adopted many policies, which all traced the fascist mode of corporate submission. The last report of Economic advisor Subramania Swami says that country is facing another balance sheet crisis in the real estate sector which may further convulse economic stability. Still, now, the government has not done anything to discuss this crisis. What we are facing now, is actually the drawback of government policies which was falsely established in the state to seek the praising of corporates. It was interesting to note the report of the Association of Democratic reforms (ADR), saying the BJP alone has 742 crores of rupees from the public as party fund in the last year and 698 was from the corporates. Primarily, we need to break this chain. Then only we can expect some inclusive economic policies from the government part.
Now, the question is how to deal with the COVID-19 panic in tandem with the economic sector? India is now facing serious problems in private consumption, investment and external trade, where all have a prior contribution to the GDP of the nation. The said problem was also revealed in the report of KPMG. As the center has enhanced 21 days of lockdown in the nation, which makes the economy in a standstill mode, private consumption will be severely affected. Moreover, the supply chain disruption will result in having low demand. The low demand will further reduce private consumption.
The lockdown may also bring a domestic supply chain crisis that may result in a lack of essential goods. Similarly, the cash flow gap to corporates will strike the investment hike that may further flatten the flow in external trade. This will clearly affect the GDP growth of the nation. Meanwhile, the Asian Development Bank (ADB) has estimated a fall in India’s GDP to 4, while Fitch calculates a slash of 30-year low loss of 2 percent growth in FY21.
Until this time, the government has not initiated any remedy measures, unless having some hogwash to the public for mental happiness. Even though the government has initiated many relief measures, it is important to know how much the so-called relief has informed in rural areas of the nation. The cut in interest rates of small savings and providing a three-month moratorium on all term loans seems to be a trap to poor and backward people. Apart from cutting the income that may receive from small savings, it is important to raise the income of the people.
What all matters is the priority that the center is giving to discuss this panic. The prime consideration needed to be in the health sector. The neoclassical welfare economics tools also give emphasis on health economics. Being in lockdown, it is important to have relief measures for the poor who have don’t even a regular job to meet their daily needs. Moreover, it is important to have rapid testing options as the Panic has high chances to reiterate in the country after an interval. Despite these needs, the government is now having some pre-recorded video conferences, that don’t even add any further relief than fear. The prime thing is the right to get informed. Even the loss of life of an individual needs to get attention and need to be well addressed. But it’s all the priority that matters the policies which stickily abide the intentions of high-class people. The Nation will not survive unless we continuously question this fascist mode of economic engagement and strive to have better financial inclusive measures. It’s all about ideas than remedies. And the question begins from the ideology of the NDA-led government.
