The coronavirus pandemic and 21-day national lockdown have brought the Indian economy to a standstill. This comes at a time when India’s economy and public finances were already under considerable strain. It is against this backdrop that India must think about how to deal with the public health crisis and rebuild its economy once its immediacy dissipates.
How should the government generate finances and design a fiscal package to stimulate the economy? What must the government do to protect all Indians, especially the poor and vulnerable, and ensure they have income and food security?
In the third episode on the Centre for Policy Research’s series on the coronavirus pandemic, Yamini Aiyar, President and Chief Executive at the Delhi-based think tank, speaks with Rathin Roy, Director of the National Institute of Public Finance and Policy.
Roy recommends thinking of this as a wartime economy where all resources are devoted to dealing with the pandemic medically, socially, and at the community level. He highlights that India could see a massive erosion in national wealth and income if the proportion of the crisis reaches even a fraction of what it is in countries like the United States and China.
Roy calls for a rethinking of the social contract – increased accountability from the government to ensure that money is spent on the allocated purposes, and adequate financing to states to tackle the crisis.
This is the third in a series of episodes by the Centre for Policy Research on the unfolding coronavirus pandemic in India. You can follow the Centre’s work on Covid-19 on Twitter or visit www.cprindia.org. You can listen to all the episodes in the Coronavirus Conversation series here.