{"id":119120,"date":"2021-07-16T19:25:18","date_gmt":"2021-07-16T13:55:18","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=119120"},"modified":"2021-07-20T17:03:09","modified_gmt":"2021-07-20T11:33:09","slug":"potential-economic-consequences-of-pandemic","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/potential-economic-consequences-of-pandemic\/","title":{"rendered":"Potential Economic Consequences of Pandemic"},"content":{"rendered":"<p><strong>Source: <\/strong><a href=\"https:\/\/epaper.livemint.com\/Home\/ShareArticle?OrgId=167b70850ea&amp;imageview=0\"><strong>Livemint<\/strong><\/a><\/p>\n<p><strong>Relevance: <\/strong>This article highlights the possible long-term economic consequences of COVID-19 for India.<\/p>\n<h5><strong>Introduction:<\/strong><\/h5>\n<ul>\n<li>A recent exercise at the <strong>National Council of Applied Economic Research<\/strong> shows a few possible scenarios.\u00a0It reveals the <strong>permanent effects<\/strong> of the pandemic shock that will persist for a very long time.<\/li>\n<\/ul>\n<h5><strong>Possible Long-term consequences<\/strong>:<\/h5>\n<ul>\n<li>Firstly, after the <strong>V-shaped growth curves<\/strong> were seen, many analysts quickly pronounced after a shock that the economy is bouncing back.\u00a0But such curves simply reflect the <strong>\u2018bowstring\u2019 effect of a negative shock.<\/strong> Thus, these can be quite <strong>misleading<\/strong>.\n<ul>\n<li>For instance, in the present case, most forecasts have suggested that the Indian economy will grow by about 8% to 10% during 2021-22.\u00a0But in the last two years, no such recovery has been seen.<\/li>\n<\/ul>\n<\/li>\n<li>Secondly, In the optimistic scenario, it is assumed that after recording a growth of over 10% this year, the economy will continue to grow at a high trend rate of 7%. However, it doesn&#8217;t look possible.<\/li>\n<li>Thirdly, even at a high growth rate, the catch-up will only happen by the year 2029-30.\n<ul>\n<li>This is also the year when <strong>our low demographic dependency ratio<\/strong> will bottom out.<\/li>\n<li>It implies that the <strong>narrow window for India\u2019s so-called demographic dividend<\/strong> will start closing.<\/li>\n<\/ul>\n<\/li>\n<li>Fourth, taking advantage of demographic dividend requires a <strong>complete reform<\/strong> of our dysfunctional basic education system to improve learning outcomes.\n<ul>\n<li>It will also require a <strong>more effective skilling program and<\/strong>\u00a0rapidly growing employment opportunities to absorb the large slack of unemployment and underemployment.<\/li>\n<li>Without these prerequisites, the demographic dividend will turn into a disaster.<\/li>\n<\/ul>\n<\/li>\n<li>Lastly, a high trend growth rate of 7% or more can only be sustained through an ambitious, <strong>wide-ranging 1991-like reform program<\/strong>.\n<ul>\n<li>As the latest Financial Stability Report (FSR) points out, the gross non-performing assets (GNPA) ratio has not deteriorated further in 2021.<\/li>\n<li>It has happened only <strong>because of regulatory forbearance<\/strong> by the Reserve Bank of India on account of covid.<\/li>\n<li>The FSR stress tests indicate that the GNPA ratio is likely to rise to nearly 10%- 11% by March 2022.<\/li>\n<li>The power sector needs transformation from high-carbon fossil fuels to renewable energy.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h5><strong>Way forward:<\/strong><\/h5>\n<ul>\n<li>Complete overhaul of the network of primary health centers, which is the base of our public healthcare system.<\/li>\n<li>Reform in the financial sector.<\/li>\n<li>The regressive return to discretionary tariff hikes and other protectionist trade policy measures needs reversal to compete in global markets.<\/li>\n<\/ul>\n<p>The need of the hour is to motivate the central and state governments to urgently introduce reforms to counter the long-term effects of the pandemic.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: Livemint Relevance: This article highlights the possible long-term economic consequences of COVID-19 for India. Introduction: A recent exercise at the National Council of Applied Economic Research shows a few possible scenarios.\u00a0It reveals the permanent effects of the pandemic shock that will persist for a very long time. Possible Long-term consequences: Firstly, after the V-shaped&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/potential-economic-consequences-of-pandemic\/\">Continue reading <span class=\"screen-reader-text\">Potential Economic Consequences of Pandemic<\/span><\/a><\/p>\n","protected":false},"author":10316,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[221,216,8430],"class_list":["post-119120","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-economy","tag-gs-paper-3","tag-potential-economic-consequences-of-pandemic","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704879598},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/119120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10316"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=119120"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/119120\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=119120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=119120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=119120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}