Policy reforms for Economic Growth and Welfare by Arvind Virmani
EGROW Webinar by R.V. Verma, Daskhita Das and Darshini Mahadevia and V.S. Rangan
EGROW Webinar by Akhil Gupta
EGROW Webinar by Arvind Virmani, Surjit Bhalla, Suman Bery, Ashima Goyal, Ashok Vishandass, Rattan Chand, Col MP Singh and Charan Singh
EGROW Webinar by Arvind Virmani, Narendar Pani, Nripendra Sarma, Upinder Sawhney, E. Bijoykumar Singh, Vighneshwara Swamy, Arti Chandani and M.R. Narayana
EGROW Webinar by Nripendra Narayan Sarma and Chandrama Goswami
EGROW Webinar by HS Upendra Kamath and Mohan Vasant Tanksale
EGROW Webinar by Udaya Kumar Hebbar, Subrata Gupta and Manoj Kumar Sharma
EGROW Webinar by Resmi P Bhaskaran, Kuldeep Kaur, Mandeep Kaur Kochar, Rakesh Batabyal and Vijaylakshmi Balakrishnan
EGROW Webinar by Prakash Loungani
EGROW Webinar by Hans Genberg and Arvind Virmani
EGROW Webinar by Kamal Jani, Subash Kalia and Madan Sabnavis
EGROW & MIT Club Webinar by Arvind Virmani
EGROW Webinar by Richard Koss
EGROW Webinar by Anjini Kochar
EGROW Webinar by Avinidhar Subrahmanyam
EGROW Webinar by Upinder Sawhney and Dharmakriti Joshi
EGROW Webinar by Ashok Vishandass, C. L. Dadhich, Meenakshi Rajeev, Sukhpal Singh, Lakhwinder Singh and Gopal Naik
EGROW Webinar by Madhurjya Prasad Bezbaruah, Binoy Goswami and Raju Mandal
EGROW Webinar by E. BijoyKumar Singh & Indraneel Bhowmik
EGROW Webinar by Manorajan Sharma, R.K. Anand & Arvind Mohan
EGROW & ASSOCHAM Webinar by Ratna Sahay
EGROW Webinar by Ashok Vishandass
EGROW Webinar by Dr. Arvind Virmani
Pandemic Crisis 2020: Lessons and reforms
- Lockdown means shutting down part of the economy. If you shut 60% of the economy for a month/quarter/year, growth will be < -60% for month/quarter/year! it also means profits & wages will be nil in the part of the economy which is shut down. The critical problem for those who are in lockdown economy is survival and monetary & fiscal policy has to address this issue. The definition of essential goods & services was expanded to include communication & broadcasting, besides health & govt services.
- Pandemic means Contagion. Surfaces were initially thought to be the main transmission media, but we now know that stale air is the most important transmission media for the SARS corona virus 2. Therefore, "contact services", which involve presence of many strangers in closed spaces are the worst spreaders of the virus from infected people. The problem is heightened public bathrooms. Thus virus quality filters, UV-C virus killers and 100% vaccination are the only ways to revive Contact services, while the pandemic lasts.
- Transition from Lockdown to Normalcy, for other goods & services (ex Contact services), involves logistics disruptions & fragmentation of markets. Thus there can simultaneously be excess supply and excess demand in different geographies which were previously integrated. Because of massive temporary shift in demand patterns can leave supply chains unable to supply new sources of demand, while demand from traditional sources is less than supply, resulting in rise in consumer prices and decline in producer prices! Well targeted monetary, credit and fiscal policies are required during both lockdown and transition.
- Once normalcy is restored, policies for re-accelerating growth becomes central. Given lags in introducing policy & institutional reform, the process is best started during the transition, so that it's in place when most of the economy(ex contact services ) has normalized. There is another advantage to introducing reforms during the lockdown.There are no short term negative effects as lockdown economy can't get any worse. Even during transition, any additional disruption is marginal.
Pandemic Crisis and Reform
As an economist who has been professionally involved in every economic crisis since 1987, I started thinking about policy implications from the moment the Pandemic hit the World and India. The slogan that we have all become familiar with during the 1991 BOP crisis, flashed through my mind, " A, crisis would be a terrible thing to waste," Looking back at 2020, it is obviously been a tragic and debilitating year for millions of people in India and the World. But the silver lining is that, the Govt of India has used this period to undertake far reaching reforms, which merit the title of big bang reforms, which will put the economy back on the fast growth track from FY22, It is useful to list the reforms, most of which have taken place since September 2019:
Big Bang Reforms
- Natural Resource (coal, spectrum, oil, minerals) Sale Through Auctions
- India Bankruptcy Code: IBC
- Goods & Services Tax: GST (incomplete)
- Monetary Policy Committee
- DBT/Aadhar Inclusive Bank accounts
- Digital India, FinTech, E-governance eg GEM, PIT seeding & audit (Incomplete eg Bharat net)
- Investment Competition into Govt monopoly through Pvt Entry (Coal, Defence; Atomic energy, Space)
- Corporate Income tax (CIT)
- Education policy (foreign competition), including medical education
- Strategic Industry & Services Policy Framework (Privatization of CPSEs, PSUs, PSB)
- Agriculture Contracts act, APMC & ECA
- Labor Code (29 =>4)
- Electricity distribution, correction of excess fees/pricing for industry (in process)
- GST simplification (rates, exemptions, Cess)
- Direct Tax Code (SMEs) DTC => MSME, Start ups
- Direct Cash Transfer: DCT through mobile wallet (<=DBT)
- Skills: Apprenticeship Act; Rural self employed, e-skilling platform.
- External /EXIM simplification & EoDB; SEZ digitized self-filing & random post filing audit; FTAs (SCRI) with EU, USA;
- Financial Sector reform (continuing process)
- EoDB(States >60%) : Decriminalization & Reduction of regulatory compliance's, Digital filing and random post-audit of all remaining regulations. Experiment In SEZs, UTs (including land & real estate).
- States: Land(Govt monopoly of land; land use regulations; cadastral survey, transfer of title-EODB )
Despite an unfavorable external environment, these reforms if taken to logical conclusion, will put the economy back on the fast growth path of 7-8% average growth, during next decade.
Thirteenth EGROW Shadow MPC Meeting held on 1st December
EGROW Expert says - Contemporary issues
Dr. Arvind Virmani, EGROW Foundation
Q1. What has to be done to increase public expenditure?
A1: On the manufacturing side, consumer durables, Capital goods and construction are among the worst sufferers from the Pandemic so far. Existing Public investment & infrastructure programs must be accelerated sharply.
Contact Services like Restaurants, hotels, travel, tourism, retail trade, entertainment, are the worst directly affected by the Pandemic. The only way to revive demand for these services is to undertake public health expenditures which will reduce fears of infection and death from the corona virus. Public health expenditures on communicable and infectious diseases and public health education in media and schools must also be stepped up. The “Swatch Bharat” mission should be expanded to promote the modernization of urban, semi-urban sewage systems. State governments should set up similar schemes for semi-rural & rural areas.
A certification system should also be set up to certify Viral load/viral quality of air in public meeting rooms, halls and other large venues. The government should start a big loan program for manufacture & subsidized purchase of Ultra-violet(UV-C) filtration systems for centrally air conditioned spaces and UV lights for cleaning of all closed public spaces, particularly bars, party rooms and public bathrooms. Ventilation improvements in workplaces, offices, shops and commercial establishment could either be part of this program or be included in phase 2.
Twelfth EGROW Shadow MPC Meeting held on 23rd Sep
Recommendation of EGROW Shadow MPC
Recommendation of the EGROW Shadow MPC Members
1 Member - 50 bp in October
1 Member - 25 bp in October
1 Member - 15 bp in October
3 Members – Pause
Forecast of the EGROW Shadow MPC Members
1 Member – reduction by 25 bp
1 Member – reduction by 15 bp
4 Members - Pause
Time will Tell
By Surjit S Bhalla and Arvind Virmani