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Time for India to assume long-term throughout Covid-19 disaster, says economist Arvind Panagariya

The COVID-19 pandemic is a “time for pondering long-term. (Reuters Photo)

Eminent economist Arvind Panagariya has stated that India should now assume long-term to create higher paying formal sector jobs by seizing the chance offered by multinationals presumably transferring out of China to diversify their operations within the wake of the COVID-19 pandemic. Panagariya, Professor of Economics at Columbia University and Director, Raj Center at Columbia’s School of International and Public Affairs, emphasised that the one factor the present disaster has revealed is the vulnerability of Indian employees to a shock that forces a close to finish of financial exercise.

The COVID-19 pandemic is a “time for pondering long-term. It will likely be a pity to let the disaster go to waste. The present disaster will solely final until a vaccine turns into obtainable. We should assume past that,” Panagariya advised PTI. “After 70 years of development effort, we have still left our workers predominantly employed on tiny farms (70 million of them averaging less than a quarter hectare in size) and in informal or self-employment in tiny enterprises that give them barely subsistence level of income on a daily basis.” Panagariya burdened that the COVID19 disaster has made it evident that India must create higher paid, formal sector jobs and that requires transferring employees out of tiny farms and enterprises into extra productive and higher paying jobs.

“That in turn requires a shift of industrial and services activity away from micro enterprises to small, medium and large ones.” Another alternative that appears to come up from the disaster is that there’s sure to be acceleration of the motion of multinationals out of China into different components of the world. “Multinationals will be seeking greater diversification of their activities in the wake of Corona. India must not miss this opportunity,” Panagariya stated.

He elaborated that one coverage measure can be to offer a critical thought to the creation of Autonomous Economic Zones through which native authorities are given as a lot authority to make coverage as exists in Chinese cities resembling Shenzhen. The disaster additionally provides the federal government the chance to introduce reforms in areas of land and labour markets which might be tougher in “peace” time, he stated including that the Land Acquisition Act should be reformed. Likewise, higher flexibility is important in labour markets in order that enterprises in labour intensive sectors achieve confidence to change into bigger thereby profiting from scale economies.

Panagariya underscored that the federal government must be artistic in lifting the lockdown going ahead. He famous that in quite a few districts, each rural and concrete, the place the instances of an infection are fewer than ten, full freedom of motion throughout the district with strict enforcement of social-distancing and use of face masks might be permitted. In districts through which infections are concentrated in geographically slim areas, free motion could also be permitted within the the rest of the areas. “As this process proceeds, the government must keep all options open. If the Corona curve begins to become steep again, it should not hesitate to tighten the restrictions again.”

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