In his address to the Bombay Chamber of Commerce and Industry, Shaktikanta Das expressed confidence that the economy is poised for a take-off, and that the central bank would support the recovery process, while maintaining financial stability. This is reassuring. He touched upon many sectors of the economy, apart from some macroeconomic concerns. What did not receive the attention it deserved was a social safety net. What the pandemic has revealed is that resilience of the economy depends not just on financial stability, macroeconomic management and corporate flexibility but also on a functional social safety net, besides effective healthcare.
The lockdown had crippled the livelihoods of daily wage earners, and, in the absence of any institutional arrangements for their food and the shelter they were no longer able to pay for, the migrants were forced to go back home to their natal villages, to take refuge in farm work, rife with elastic underemployment, and the traditional obligations of kin. The government planned and executed free food distribution in villages, as well as enlarged rural employment schemes, to offer some relief. But, in urban areas, but for voluntary help from some religious and civil service organisations, there was little succour for those whose livelihoods were taken away by the pandemic. Designing some form of institutional relief that would automatically kick in, in times of stress, is a vital challenge that has to be taken up.
No economy can become resilient with creaky health infrastructure, a sector that did receive Das’ attention. This, too, must be built new from ground up, with new emphasis on data management and sophisticated testing, including gene sequencing.
This piece appeared as an editorial opinion in the print edition of The Economic Times.
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