indica News Bureau-
Backing strong radical reforms, retired Indian banker and former chairperson of the State Bank of India, Arundhati Bhattacharya on Tuesday said that this is the time to ensure there is no panic, but also to have a plan for the economy post-pandemic. She also said that there should be a time-limit to relaxations provided to states and the people to prevent the misuse of the government’s capital.
In an interview with Economic Times, Bhattacharya said that the whole economy will be impacted due to the pandemic and country-wide lockdown and there need to be strong plans to bring the economy back on track. She added that everyone is hoping that India does not suffer the same fate as Europe and US.
“We are all keeping our fingers crossed that India does not go the way of Europe and America. This is something that has never been witnessed before in our lifetimes and it would be foolish to say what the outcome will be!”, she said.
She added that there was a need to keep building confidence to assure people that “we are capable of withstanding the storm, no matter how severe it is and that we will come out well on the other side of it.”
Stressing on the importance of having a plan to overcome the slowdown after the pandemic, she said, “We have to understand that this is another situation like 1991 when you will need very strong radical reforms to put the economy back on track. We already had a number of soft spots in the economy when the storm broke. Now instead of soft spots, the whole economy is going to be impacted.”
“We have not been able to keep the workers at their places of work so that the moment the pandemic eases, they can get restart operations. Most sites have got demobilized and remobilization will take some time. So even in the best-case scenario, even if you say that the whole thing abates in say 60 days, even then remobilization will take a bit of time. The policymakers will have to keep tweaking whatever measures they have given to make sure that the near term is taken care of and then look at the medium and the long term to put the economy back on a firm growth path”, she said to ET.
She further said that at present the government does not have any other option but to print money and spend it to treat people, but even that should not be allowed to continue unchecked for a long time. “You have to use that only as long as it is absolutely necessary. After that, people must get back into productive employment,” said Bhattacharya, adding, “There are several sectors that are impacted and the government needs to take action on those sectors and find out what is impacting them. In the power sector, the dues are piling up. We cannot allow the discom dues to pile up in this manner. Now to leave it all to the state government and say that that is the state matter is no longer going to help.”
She suggested that all the states need to cooperate and collaborate to resolve the power payment issues and there was a need for tough decisions from the center. She added that peoples’ concerns and fears need to be addressed to ensure ease of doing business.
On the issue of providing relaxation and tariffs to states, she said, ” Today it is actually a war that we are fighting. The enemy might be microscopic but it is a war. In war times you have to make relaxations and you cannot start looking at who is deserving and who is not. But let us not sabotage our country by misusing it.”
“The main key is to know when to stop the relaxations. Relaxations will be needed because at this point of time you really cannot separate the wheat from the chaff. So yes there will be some amount of misuse, you cannot stop it. But you should start tightening the screws again when the time is right and therein lies the wisdom of our people.
“Many times what happens is that when we start allowing these relaxations, we just go on and on with them because they are populist in nature. We have got to avoid the temptation of getting into that,” said Bhattacharya.