The post-Covid world will need unprecedented responses on the economic and financial front. India can either lead the path, or wallow in drudgery.
By Anuraag Saxena
Beyond the immediate and direct toll the virus takes, is the long-term mutilation to the global economy. The Covid-19 pandemic could destroy 195 million jobs, there is an increasing case for protectionism and localisation of supply chains, oil prices have fallen to 2002 levels, and stock indices have taken a 22-28% hit. The world could collectively end up paying a cost of $4.1 trillion (that’s Rs 311,169,500,000,000).
Where does that leave India? Simply put, India either bears the brunt of a problem someone else created, or India takes a step back and sees this as an opportunity to make some serious changes.
Here is a laundry list of ‘crazy’ ideas, in no way exhaustive, to jolt us out of these ridiculous times.
Blanket extensions. Period!
India has to provide blanket extension to all the schemes expiring in 2020. Period!
Take the case of the SEZ scheme which ended on March 31, 2020, bang in the middle of the lockdown. Not just did this throw a large set of foreign investors into a tizzy, it throttled the primary incentive that drove investments into India, at the very time India needs it the most.
What if India gave a blanket extension to the SEZ scheme and many others expiring this year? Especially so for non-expenditure schemes that lead to asset or job creation. India needs to steer away from unknown-unknowns and ensure continuity at a time like this.
Truly democratised decisioning
India’s citizens have been increasingly frustrated with bureaucratic decisioning, and the ills that come with the ‘babu’ culture. On one hand, India’s bureaucrats display an exceptional level of talent (UPSC exams have the world toughest pass-rates), and many even the best of intent. On the other, being primarily focused on generic and programmable skills prevents them for gaining deep experience and a worldview needed for such extreme times.
What if the government created groups of industry experts, to take non-programmable decisions? What if a group of industrialists decided how bailout packages would be deployed (with checks and balances, of course)? What if a group of doctors decided how PPE kits should be distributed? What if fund managers designed an ‘India-roadshow’ across the world? India needs a coming-together of intent at this point. It’s time to redirect this intent, to bring in confident, self-assured, experts to do what they are best at.
The end of ‘lagaan’
Over 3,100 of India’s laws are vestiges from the colonial era. Taxation and financial laws especially were formulated under a ‘pound of flesh’ mentality. Not only are these incompatible with the cultural DNA of India, but have morbid implications on societies. Farmer suicides, businesses going under, and stories of tax terrorism, are now relegated to by-lines.
What if we struck off all of them in one fell swoop? What if legislators gave themselves an end date on which these laws stopped applying, say March 31, 2021? No individual or entity would be liable to pay tax if an alternative law doesn’t exist by then. Indians are especially good at last-minute cramming (remember the last two hours just before our exams?). Forcing a finite end-date might just force us to stop plodding along.
Times of crisis seed new ideas to emerge. Times of flux provide them an opportunity to sprout and take root.
All three civilizational nations—China, India and Israel—have historically had economic models aligned with their own cultural values. While China and Israel have proudly embraced their historical rootings, and reflected it through economic policies, India hasn’t.
So while we always had the concept of daana & punya-kamaana, we imported the western model of CSR. While we always had the Arthashastra, we tried to shake Adam Smith’s invisible hand. While Lakshmi was revered, its creators were doubted and demonised.
What if we took this opportunity to restate what our own/indigenous version of economics looks like? One that is not aligned to constructs like capitalism or communism, but our gift to the world.
Re-nationalisation, state capitalism
India has nationalised airlines and banks before, and to disastrous affect. However, taking over of private property at that point was rooted in Nehruvian command-and-control ideology.
Today, however, one sees the disastrous effects of private enterprise gone spring-break crazy. Perhaps it is time to think of re-nationalisation of some sectors; especially those that (a) impact national security and (b) monetised public/natural resources in the first place.
What if we as a nation reclaim data, resources and goods that belong to all of us collectively? This allows to safeguard national wealth at this perilous time, and retain value that is created domestically.
Only the ridiculous will survive
Whether we like it or not, this financial crisis will shake us out of our complacency. The question is, do we take a linear, painful view; or do we get ambitious and take the bull by its horns? Finding an opportunity in crisis takes courage and confidence, which today’s self-assured India seems to have.
Of course these ideas are impractical, perhaps even ridiculous. However, ridiculous times call for ridiculous measures. This is the worst time in history to be pusillanimous. The biggest mistake we could make right now is to use paracetamol when the economy needs a defibrillator.
The author, based in Singapore, leads India Pride Project. Views are personal.