The State Of Economic Development In South Asia - #EconDevDiscussion - Impact And Policy Research Institute (IMPRI)

A #WebPolicyTalk series by the #IMPRI South Asia Studies Center (SASC)

The recent ongoing pandemic COVID-19 and the compelling lockdown has changed the life and livelihood of people drastically. Not only India, but almost all the countries across the continents have also been affected. Not only the fact that the country has been reeling under recession since last February as revealed by the drastic contraction of GDP (by 23.9%) in the first quarter of 2020-21; the government treasury has become thin for a drastic fall in GST collection in connection with the fall in production activities.

The large-scale closure of several productions and business units for several days owing to lockdown has caused the unemployment rate to reach its maximum in the last five decades and led to the migration of workers to their native places. The informal sector is the worst hit and many of the returnees are compelled to adopt inferior occupations with meagre earning scopes. International trade has reached its lowest excepting the transaction of essential items like medicines, medical equipment, and the like.

The imports during April-May 2020 declined faster than that of exports and that led to a rise in foreign exchange reserves. It is of course not a necessary indication of development as many of the capital goods and sophisticated technology have not arrived at the required places, though a part of the import bill has been saved due to less crude oil import.

The government has compelled to announce curtailing of several expenditures and to meet the increased expenditures on compensation package (cash transfer, free ration, enhanced MGNREGA expenses, etc.), tax/excise duty on petroleum products has been enhanced. Possibly, some development budgets might have switched over to the social transfer schemes.

Closure of transportation has not only affected the earning of people involved in transport and communication, it also disturbed market linkage and widened agricultural price variations between the production source and end-users. The tourism and hospitality sector (the fastest growing industry of the recent past have the strongest income and employment multiplier) have reached its two decades the lowest point. For reduction in both earning of people (and thus spending capability in general) and production activities, there is a downward spiral movement in the market from both demand and supply sides. Education and learning have changed to online mode for the closure of educational institutions for some uncertain period.

This, in turn, caused expenditure on electronic equipment (mobile, tab, laptop, etc.) and internet data-pack to rise in both quantity and price, which has increased the stress on the purse of the poor people. On the other hand, the earning of electronic and software business houses has been multiplied (a prominent example is Reliance industries). Despite the decline in GDP in the first quarter, it thus appears to enhance income inequality. People, especially the student communities across regions are subject to the digital divide and there has been a surge in drop-outs, and it would be difficult to bring them back to school again.

Several changes in industrial and agricultural policies have been made in recent times to revive the small and medium scale industries and boost up the agricultural sector. The prime objectives of these changes are to bring back the economy out of the recent recession imposed by the recent worldwide pandemic and to scale up the activities at least to the pre-COVID-19 situation and subsequently on the growth path.

Apart from compensatory measures, liberal measures on loan defaults by extending the period of declaring non-performing assets, provision of soft loans for MSMEs at reduced interest rate have been adopted though all these have not yet shown any significant positive result. The government is now falling back on agriculture as the saviour of the economy and several measures have been taken including a loan for agricultural infrastructure as reduced interest, widen MGNREGA activities, etc.

With this background, the #IMPRI South Asia Studies Center (SASC), along with Counterview and Centre for Development Communication and Studies (CDECS), Jaipur, is carrying out a discussion series called The State of Economic Development in South Asia – #EconDevDiscussion. The series involves policy discussions and examination at the cross-country level, especially at South Asia level as all these are affected due to COVID-19, maybe at varied dimensions and intensity. This discussion series will explore the areas of national and international policies in economic development and trade. The series explores the role of governance, corporations, civil society, the populace, and other actors in realizing an equitable society.

The #WebPolicyTalks are conducted via Zoom webinars and streamed live on Facebook. The event video is available on the IMPRI YouTube Channel, thereafter. A recording of the session is also available on the #WebPolicyTalk: Live at IMPRI podcast, on Spotify and Google Podcasts. An event report is published based on the deliberations and wider dissemination takes place through media coverage.

YouTube Playlist: The State of Economic Development in South Asia – #EconDevDiscussion

The audience is composed mostly of policymakers, practitioners, researchers, faculty, and University and college students across India and other countries.

The outcome of the deliberations is disseminated through various social media platforms and media outlets and is aimed at contributing to the future courses of action for policymakers, practitioners, researchers, and civil society organizations.

YouTube Playlist #EconDevDiscussion

FB Watch Playlist #EconDevDiscussion

Below is the list of #EconDevDiscussion events, along with links to the relevant details: