The unprecedented COVID crisis affected not only India but economies worldwide. To contain the adversity, the Government of India has rolled out various policies, schemes and stimulus packages. As the country faces the second wave of COVID-19, the economy hesitates to rise, however, frequent efforts to empower businesses and the shift to digital is being considered the route to recovery, writes Adarsh Som of Elets News Network (ENN).
The year 2020 has been full of ups and downs and the outbreak of COVID-19 pandemic redefined normality across the globe. Since the onset of the pandemic, global markets have been hard-hit as many countries imposed a nationwide lockdown to break the chain of the viral infection. India was no different. The Indian Prime Minister Narendra Modi announced a nationwide lockdown on March 24, 2020, that brought the entire nation, catering to the world’s second-largest population, to a halt.
What COVID Caused?
The sudden suspension of economic activities resulted in a major slump in the Indian economy. Another concern was the series of lay-offs that started shortly following the lockdown announcement. A significant number of people lost their jobs that resulted in a drop in the purchasing power of the people. This weighed on to the already dire condition of the nation’s economy. Following the historic decision of imposing lockdown by the Government of India in March 2020, the World Bank, in October 2020, released a statement that India’s GDP is expected to contract by 9.6 per cent this financial year. The latest South Asia Economic Focus report by the World Bank forecasted a sharper slump of 9.6 per cent in the economy than the expected 7.7 per cent.
Government’s Comeback
Though the Indian government’s initial action was well lauded by the countries worldwide, no doubt lockdown was an effective means to prevent the disease from spreading. However, the consequences shook the economy and the government had to come up with an effective strategy to revive the drooping economy and fight the pandemic as well. This is when Prime Minister Modi, on May 12, 2020, announced the ‘Aatmanirbhar Bharat’ package under the ‘Aatmanirbhar Bharat Abhiyan’ with an aim to make India self-reliant. Following this, the Union Finance Minister Nirmala Sitharaman laid down the details of the Rs 20 lakh crore Aamanirbhar Bharat package in a string of conferences from May 13 to May 17 and gradually released the amount.
Following the announcements of the stimulus package by the Finance Minister, the implementation was done in a gradual manner as follows:
- Global tenders for up to Rs 200 crore were discontinued to provide the benefit to the Micro, Small and Medium Enterprises (MSMEs).
- All the contractors working with the Central Ministries were given a relief of six months to complete their deliverables.
- The Centre, keeping in sight the unprecedented times, allowed States to increase their borrowings from three per cent to five per cent.
- The Centre earmarked Rs 3 lakh crore for the businesses and MSMEs and allowed them to borrow automated collateral-free loans.
- Also, the Government kept Rs 45,000 crore for Partial Credit Guarantee Scheme 2.0 for NBFCs.
- In order to provide additional emergency working capital funding for farmers, the Centre kept open Rs 30,000 crore through NABARD.
- Further, the Centre announced TDS rates for specified payments and specified TCS rates by 25 per cent to provide Rs 50,000 crore liquidity. Also, similar measures were taken for other types of taxes as well.
- To empower businesses and startups, the Government gave attention to the Ease of Doing Business aspect and took certain measures related to IBC.
- Finally, the Centre came out with special liquidity schemes for NBFC, HFC and MFI for up to Rs 30,000 crore.
The Government of India with its Aatmanirbhar Bharat Mission targetted the development and growth of the local, rural and tribal industries to empower the local producers and manufacturers. The move gave a kick start to the economy which started limping in the positive trend. Also, PM Modi emphasised on the consumption of the local products and urged the citizens to be ‘Vocal for the Local’.
Digital Transformation
The wave of digital transformation is sweeping across the country since the past few years. This digital transformation powered by advanced technologies and new-gen tools is driving the transformation of the power sector, education sector, IT sector, smart cities, disaster management, and more. And, the COVID pandemic pushed the digital transformation and resulted in India’s rapid adoption of technology.
As India started stabilising with the help of the Aatmanirbhar Abhiyan, another challenge that surfaced was to keep the government offices, public sector operations and even the private offices functioning keeping social distancing in check. This is where the digital space came in handy and remote working became the new normal. The Government of India and the State governments took the digital route and adopted technological tools for business continuity. Organisations like the National Informatics Centre (NIC) developed various tools like e-office to allows governments officials and employees to work productively from anywhere and at any time.
Besides this, the rapid adoption of technology opened immense opportunities to leverage emerging technologies like AI, IoT, Cloud, etc. to ensure enhanced outcomes, data security, effective approach and agile functioning. Leveraging these technologies, today, the traditional education system has evolved into smart classes and students can learn from the comfort of their homes.
Moreover, this has transformed the Healthcare sector as well. Today, technology has enabled doctors to remotely examine patients through Telemedicine facilities. Also, patients can be monitored remotely, one of the measures used by various States to monitor COVID patients. Technology is also powering the agriculture sector and providing enhanced and efficient ways for irrigation, soil quality check, water management, crop data collection, etc. On similar lines, industries are moving towards Industry 4.0 wherein digital presence and functioning is going to be a basic need. And, similarly many government, public and private sector industries are leapfrogging towards development using technology.
The Way Forward
The way forward should be a concerted and collaborative push towards the next phase of this transformational journey wherein the government needs to future proof their functioning and build capacities of their workforce and bolster government-industry collaboration to drive a new era of digital breakthroughs to benefit the nation. Also, with the shift to digital, technology needs to affordable, scalable and secure to meet the needs of governments, businesses and the people. Further, the government must focus on devising appropriate policies and enhancing digital infrastructure that will spur greater innovation and tech advancement in the country.