Boost economy beyond Economics 101

The Economic Times, November 11, 2020

By: Pradeep Mehta & Sarthak Shukla

A couple of months before the nationwide lockdown was imposed in March, Finance Minister Nirmala Sitharaman presented the Union budget, which was premised on three main themes: aspirational India, economic development (for all), and a caring, compassionate, and humane society. More than six months into the Covid-19 pandemic, these themes represent the crucial benchmarks that we, as a nation, are striving to achieve in order to build a resilient Indian economy.

In an inter view to the Economic Times late last month, Prime Minister Narendra Modi clarified the underlying essence of Atmanirbhar Bharat — which is to enhance the domestic manufacturing of industrial goods while remaining relevant in the global economic order. While this vision reiterates what is being propounded by many economists, its implementation will require thinking beyond the basics of economics, if goals like inclusive growth, humane society and aspirational India are to be realised.

The stepping stone to it, which has been taken by the central and many state governments, is to provide political mileage and credibility to steps taken for post-pandemic economic recovery. While at the national level, it came through the PM’s multiple addresses to the nation, followed by the relief measures announced by the finance minister, the same was done through concerted efforts by the chief minister’s office in many states.

In almost every state, for example, the task of reviewing and monitoring the Covid-19 situation, and later the relief measures, was directly supervised by respective chief ministers. In some states like Rajasthan, a transformative economic advisory council to the chief minister has been formed. It held its first meeting in October with an agenda to assess the economic situation and draw a roadmap for the state’s economic future.

However, to give effect to such visions, caution must be exercised. This means framing economic policies for the future by keeping in mind the structural issues plaguing the economy in the past. Without this a forced and unsustainable recovery of certain economic metrics might be achieved, but the aspirations of an aspiring India will be compromised.

The main roadblock to achieving this vision of inclusivity of economic growth comes not from conventional theories of economics gone wrong, but a behavioural and mindset problem dictating the economic and political discourse in India. There is a need to take a step back and ponder over some basic questions. Is striking a right balance between enterprise’s profits and worker’s wages, essentially an art of wise compromise? Why has a problem of perception developed and sustained which has pitted enterprises and workers against each other ideologically and otherwise?

Answering these questions becomes extremely vital if we wish to rebuild our economy in an inclusive and resilient way. This can be done by infusing an element of humanism in our efforts of economic revival by keeping in mind certain crucial dimensions.

First, the existing efforts by various states to boost their economy must be complimented by a thrust on human value-creation through the proposed measures. For instance, the ‘one- district

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