India can build on rural push, federalism, consumer base

#GS3 #ECONOMY

Though COVID-19 and the subsequent lockdown left a trail of economic devastation in most countries, India can potentially build upon three positive aspects - a push in the rural economy, stronger federalism and a huge consumption base.

  • The challenge for the Centre was to ensure economic growth and that growth is inclusive, with lower income households too enjoying the benefits. 
  • The expanded MNREGA provided a lifeline when most needed, and the frontloaded transfer payments to women, pensioners and farmers have helped revive demand.
  • Brisk procurement by the Food Corporation of India has buttressed farmers’ incomes while it helped the government extend the food security programme until end November.
  • India’s federalism - ‘warts and all’ - has withstood the test of vigorous democracy though there were tensions between the Centre and the States on issues such as GST compensation.
  • A ‘V’ shaped recovery in growth rate did not mean a ‘V’ shaped recovery in absolute output and that the level of output in FY22 will be lower than that seen in FY20.
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