In bits & pieces
The sector-wise breakdown of the Indian economy gives a fair picture of the impact COVID-19 will make and the extent to which the government will have to go to recover from the fall. The IMF has already forecasted a contraction of 3 per cent for the global economy, bringing the decline at par with the Great Depression that happened nearly a century ago and worse than the financial crisis that occurred a decade ago. The contours of decline can be well-drawn but it would come down to individual efforts to make headways to come out of such adversity. Going by established data as per the Ministry of Statistics and Programme Implementation, India's service sector accounts for 54.40 per cent of India's total Gross Value Added (GVA). It is followed by Industry sector at 29.73 per cent and Agriculture at 15.87 per cent. The breakdown shall be useful for India in improvising its economic policies under the dire consequences of the pandemic. The lockdown brought all sectors to a complete halt barring the essential supply chains that, in fact, went overdrive. As required, the administration ensured double-checks to keep those supply lines proactively running while practising social distancing — the only effective tool in this pandemic. But how long can the economy be shut? The question haunted the government and devising an exit plan was inevitable. The MHA advisory following the extension of lockdown aims to revive the economy in bits and pieces. While India is still experiencing a surge in cases every day, the affected areas have largely been identified. This identification has two takeaways. One, the government can focus on deploying healthcare and essential supplies more towards these containment clusters and two, it can focus on bringing the relatively less affected or unaffected districts back to normalcy. Of course, social distancing remains an undisputed prerequisite in all places and would be so for the next few months. Now going by the economy break up, it is clear that the service sector is bound to take a hit as the most affected zones happen to be urban settlements where service sector operations are maximum. Hotels and restaurants, Transport services, Real estate and professional services, etc., stare into the abyss as urban districts will bear the brunt of the lockdown extension till May 3. Although some services have been allowed under the lockdown such as e-commerce, banks and public utilities. The Industry sector, split between urban and rural districts, has been given some relaxation post-April 20; establishments engaged in the production of coal, mine, mineral, packaging material, jute, brick kilns will be allowed besides those tasked with the production of essential items. Further, with slashed workforce and regulated shifts, many more industries might start in the due course of time. But both industry and service sectors will return to normalcy only after the lockdown ends i.e., when major manufacturing units and professional services kickstart the economy in full scale.
What can benefit the most from the relaxations issued by MHA is the agriculture sector. Farming operations including procurement of agricultural products, agriculture marketing through notified Mandis. The direct and decentralised marketing, manufacture, distribution and retail of fertilisers, pesticides and seeds. Further, the activities of marine and inland fisheries; animal husbandry activities including the supply chain of milk, milk products, poultry and livestock farming as well as tea, coffee and rubber plantations are allowed to be functional. In fact, it is not restricted to farms. With MGNREGA and operation of industries in rural India, the idea is broadly to kickstart the rural economy at the first stage. As far as growth is concerned, all countries are bound to take a heavy blow but with staggered exit strategy such as the resumption of the rural economy, India can make headways and gain the confidence to overcome the pandemic and bring back normalcy.
