PM’s Ideas Could Possibly Spark off a Self-Reliant, Vibrant and Inclusive India
Prime Minister Narendra Modi’s 8pm speech on 12 May 2020 was very important for many reasons. One, India and its citizens were looking for a clear strategy from him with regard to dealing with the economic impact of the COVID-19 crisis. Two, Indians were also anxious that after the 27th March stimulus of Rs1.70 lakh crore and various moves, including two reverse repo rate cuts announced by the Reserve Bank of India (RBI), further stimulus had not been forthcoming despite the ongoing lockdowns, which has literally seen the economy stall. On this backdrop, the Rs20 lakh crore stimulus (about 10% of India’s GDP) announced by the prime minister is very welcome and should give Indians a great sense of relief—indeed, I have previously argued that India’s economic stimulus needs to be at least of the order of 10% of GDP, if not more
 
That said, the details of this package are awaited and hopefully, as alluded to by the prime minister, the total economic stimulus of Rs20 lakh crore will take care of the urgent and emerging needs of farmers, poor and vulnerable people, the micro, small and medium enterprises (MSMEs) and others and push India into a new era of prosperity and self-reliance. 
 
Even as we wait for the details of the economic package announced by the prime minister, it was also refreshing to hear several themes espoused by him in his speech. He talked of reforms in land, labour, laws and liquidity—clearly, as I have written several times, radical reforms in these areas are necessary for India in order to take advantage of the likely forthcoming exodus from China. 
 
Likewise, the prime minister spoke at length about supply chain reorganization and the need to create India focussed supply chains. This again was expected and certainly welcome. It should ensure that we don’t suffer the kind of supply chain disruptions that we faced in January-March 2020 because of the virus and lockdowns in many countries in China and elsewhere. The prime minister’s overall strategy of ‘being vocal about local production” is also clearly a sound one that should help in strengthening Indian manufacturing and promote India’s self-reliance. 
 
But one aspect that India needs to safeguard here is nicely put by a global supply chain expert from the US, “Natural resources are not evenly distributed across the world. Two defenses that would evolve here are: single material diversification (e.g. rare earth metals) through substitute materials and technologies. The other tactical defence would be increased safety stocks of critical materials. Just in time inventories will yield to just in case inventories for these critical materials. For example, the US has a strategic petroleum reserve or stockpile. Other nations like India and China will have to emulate it as current low prices are a great time to build stockpiles for nations, especially, those with deep pockets. While this strategy may not be necessary for all industries, it would be critical to focus on industries that use medical, defence and technology raw materials. Clearly, we are not going to be devastated by cocoa being concentrated in Ghana, but medicines are different. Thus, for critical supply chains, going into the future, national supply chains will be more important relative to today. The state will play a bigger role in future, not just through direct fiscal and monetary policies (e.g. stimulus) but also indirectly through regulations and mandates.” 
 
So, while the Indian prime minister’s call to strengthen local supply chains is indeed very appropriate, it also needs to be accompanied by commensurate measures in building stockpiles of strategic reserves of key raw materials as outlined above. Additionally, the proposed reforms in laws, land, labour and liquidity as suggested by the Prime Minister, should also help ensure the development of sound national supply chains. 
 
The prime minister also talked of rationalisation of taxes and that is really necessary to make India into a vibrant and future driven economy. I really hope that the prime minister ensures the implementation of a variable banking transaction tax that will replace all direct and indirect taxes. As I have written earlier, the variable banking transaction’s tax (BTT), which will have an average rate of 1% with differential rates for different categories of transactions and businesses etc., is very viable, when one takes into account the data from the RBI payments system for years 2018-19 and 2019-2020. 
 
The BTT reform will also have to be accompanied by additional reforms to mop up black money including reduction of stamp duties and registration charges for property to ½ % and increase of property/land guidelines values so that they correspond with property/land market values. When property guideline values equal market values, the scope for undervaluing the property sale and black transactions gets eliminated. Furthermore, other measures (using 85% carrots and 15% stick) must also be used to retrieve and bring into the banking sphere, the existing black money within India as well as those stored in illegal accounts abroad. This is long overdue and can be of crucial help at this juncture. 
 
Finally, the prime minister rightly stressed on the need for consumption of local products and hopefully, this should help India get over the huge consumption shock that awaits us and build up the necessary demand required to kick start the economy again. Clearly, if well-conceived and implemented, the kind of measures that the prime minister is talking about, should also help us take care of supply side issues as well. 
 
Together, I would expect these to turbo-charge domestic consumption, significantly enhance domestic savings, further reduce interest rates for lending and make our exports truly competitive and ensure that our local brands really become global. The measures recommended by the prime minister should also enhance the overall size of the economy, especially if the parallel (black) economy and informal sector are fully absorbed into the mainstream as I have stressed many times. 
 
And undoubtedly, all of these reforms should cumulatively serve as a impetus, more potent than before, for development, including investment in infrastructure, health, and education and thus help transform India into a truly inclusive yet rapidly growing and vibrant economy. 
 
(Ramesh S Arunachalam is author of 12 critically acclaimed books. His latest release in January 2020 is titled, “Powering India to Double Digit Growth: Five Key Steps To A Robust Economy”. Apart from being an author, Ramesh provides strategic advice on a wide variety of financial sector/economic development issues. He has worked on over 311 assignments with multi-laterals, governments, private sector, banks, NBFCs, regulators, supervisors, MFIs and other stakeholders in 31 countries globally in five continents and 640 districts of India during the last 31 years)
 
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    COMMENTS

    sherna.gandhy

    7 months ago

    Without knowing the details how can anyone say it's an excellent package.? What is wrong with you commentators?

    REPLY

    rameshsa2009

    In Reply to sherna.gandhy 7 months ago

    A package has a vision and that was commented upon. A package cannot be excellent without a great vision and the contours of the package had an excellent vision (in my opinion). All the right things were talked about. That said, I have clearly specified that details are awaited and much will depend on the details and the implementation of course.

    Nahom

    7 months ago

    Anyway world will end for humans by end of this century. It is too late for India to radically transform. So why lead simple living and humane thinking. Lockdown and a microscopic virus have taught us so many things. Nothing wrong with negative growth which we badly need especially in so called developed Countries.

    mahesh.kalkar

    7 months ago

    Very well articulated article. I would like to hear Author's views on the following:

    It is easy for PM to say 'go local'. Having seen or experienced world class products, a customer who has money will not buy a 2nd class local product when he has the accessability for better foreign one.

    How to force loal manufacturer to produce the best? First - incentivise with tax sops for those manufacturers who can stand upto global products. Second - tax the foreign products competitively close to domestic products. In spite of exhorbitant taxes, people who can afford buy Audi, BMW cars, Apple, One Plus cell phones.

    Importantly, we need a mindset change to make us the best. The performers need to be distinguished from the laggards. If we don't do this - 'go local' will only remain a slogan.

    REPLY

    rameshsa2009

    In Reply to mahesh.kalkar 7 months ago

    Very true, Indian manufacturing and services will have to step in several spheres including (but not limited to) innovation, R & D, governance and differentiation of product (both goods and services) if they are to compete with the worlds best. Rationalisation of taxes and incentivsing local players is again critical as you have said. Hope that happens soon.

    The customer looks for value and therefore is prepared to pay more for longer lasting and higher quality products, which also have the added brand value. Cannot blame them and I only hope that Indian companies can now compete with truly brands and offer choice to the customers

    Thank you for your kind words. Kind Regards

    rameshsa2009

    In Reply to mahesh.kalkar 7 months ago

    Sorry. I just saw your comment now. It is 12.35 am. I am very tired and kindly bear with me. I will respond before end of day tomo. Thank you. Kind regards

    PM Modi Announces Rs20 lakh Crore Economic Package To Build a Self-reliant India; Lockdown 4 To Have New Rules
    Indian prime minister (PM) Narendra Modi on Tuesday announced a whopping Rs20 trillion (Rs20 lakh crore) package to build a self-reliant India and to overcome the coronavirus (COVID-19) pandemic. "Considering the packages announced by the government, the Reserve Bank of India (RBI)'s announcements and the package being announced today, it will come to a total of Rs20 lakh crore rupees, to support our people," the PM says.
     
    Talking about the fourth phase of the lock-down, the prime minister says, "Lockdown 4 will be different and have new rules. We have been receiving proposals from several states, and would announce the details on lockdown on before 18 May 2020."
     
    In his televised address, the PM says, "India's self-reliance will be based on five pillars—economy, which makes quantum jumps rather than incremental change, modern infrastructure, tech-driven system to fulfill 21st century dreams, world's vibrant demography and demand. This special economic package is for our labourers, farmers, honest taxpayers, micro, small and medium enterprises (MSMEs) and cottage industry."
     
    During the crisis, it is the 'local' which has saved us, the PM said, adding, "Thinking local is not just our necessity, but a responsibility too. We want to make it our life mantra. Even those which appear to be global brands were local once."
     
    "When the crisis started then not even a single personal protection equipment (PPE) kit was manufactured in India, only a few N95 masks were available.
     
    Today two Lakh PPE kits and two Lakh N95 masks are manufactured in India on daily basis," he says. 
     
    According to the prime minister, India's medicines give a new hope to the world, during this time of crisis. He says, "The world is coming to believe that India can do very well, that it can contribute in a significant way to humanity. The definition of self-reliance is changing in the global world. India's thought process and culture gives hope, we talk of our self-reliance which is founded on the world as one family."
     
    Earlier in his speech, PM Modi said that more than 4.2 million people from different countries have been infected by COVID-19, more than 0.27 lakh people have lost their lives due to the virus. 
     
    "Many Indians have lost their loved ones, my condolences to them. Crores of lives in the world were in peril. It was unimaginable for the human race. But being tired, losing and breaking spirit is not acceptable to mankind. We have to save ourselves and move forward," he says.
     
    The PM said, "We have been hearing that the 21st century is India's. We got the opportunity to understand world situation in detail. It is now not only our dream, but also our responsibility, to make 21st century India's."
     
    Prime minister Modi on 24th March had declared a 21-day country-wide lockdown for the first time to break the chain of transmission of the novel coronavirus pandemic. On 14th April, it was extended till 3 May 2020. Just two days before this, the ministry of home affairs (MHA) in an order extended the third phase of lock-down for two more weeks. The third phase of lockdown would have continued till 17th May.
     
    In a statement, MHA had said, "After a comprehensive review and in view of the lockdown measures having led to significant gains in the COVID-19 situation in the country, the MHA, issued an order under the Disaster Management Act, to further extend the lockdown for a further period of two weeks beyond 4 May 2020."
     
    The ministry had also issued new guidelines to regulate different activities in this period, based on the risk profiling of the districts of the country into red (hotspot), green and orange zones.
     
    Green zones are districts with either zero confirmed cases till date or no confirmed cases over the past 21 days. The classification of districts as red zones will take into account, total number of active cases, doubling rate of confirmed cases, extent of testing and surveillance feedback for the districts, the ministry says.
     
    Districts, which are neither classified as red zone or green zone will be classified as orange zone.
     
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    COMMENTS

    shetyerb

    6 months ago

    Another Jumla.
    FM even said that they paid the rail fare of the immigrant workers.
    In Maharashtra it was paid by Government out of CM fund.
    The list of such false claims is quite long. Not worth wasting time over it.

    bala.mathur

    7 months ago

    The intention may be good. Now let us see whether the implementation and delivery systems work..

    Nahom

    7 months ago

    Another Crony bonanza this time named self reliance.

    gopalakrishnan.tv

    7 months ago

    Excellent package silencing all critics and giving the much needed boost to the economy to deliver and perform without any hindrance if any from bureaucrats and wrong doers who challenge the Governance standards and loot the economy through public and private Financial Institutions.It is time to restore the lost values and ethics and work for the Political economic social and technological development of the Country in a spirit of unity and see that the Vasudevaka Kudumbam is a reality in the years to come. Hope the reforms in the area of land, labour,law and Liquidity would be in place at the earliest and the inequality seen in the country gets gradually wiped out benefiting the people all around. Well done by the Government and now it is for the people to perform and show the abilities to excel everywhere to deliver and reach the Pinnacle of the world in the economic and social development.

    ganesanjaicare

    7 months ago

    I BELELEIVE MR DEBASHIS BASU WILL BE SURPRISED DEFENITELY

    At Sion Hospital, They Gird Their Hearts with Silent Fortitude
    Sion Hospital, a major tertiary hospital, is strategically located at the junction of two express highways, in the middle of three major railway tracts and adjacent to the biggest slum of Asia, namely, Dharavi.
     
    Hence, every possible casualty is directed to the hospital—whether they be highway accidents or railway accidents or disasters—natural as well as manmade! People falling out of running trains and road accident victims are also taken to the Sion Hospital and are treated on an emergency basis. 
     
    The hospital is the main source of medical help for a huge population of Mumbai living in the slums, the 'poorest among the poor', who opt for this free of charge Hospital for every illness and emergency. All these factors lead to a disproportionately large demand on the emergency services of the Hospital even at normal times. 
     
     
    Twenty years ago, an idea was floated to upgrade the Casualty to Emergency Medical Services (EMS). The work on building an EMS began in 2000 and it was ready by 2003. The existing 10,000 sq. ft. lobby was modified and every room and space was built in conformity with the highest quality medical care specifications.
     
    Yet, with a burgeoning population, the EMS, like the rest of the city, is now overcrowded and faces a space crunch. We learn that a total reconstruction of the hospital was planned, but the idea has not taken off yet. To demolish a functioning hospital that is already over-crowded and under pressure and to rebuild it, without inconveniencing patients, is a huge challenge! 
     
     
    So, the EMS bravely continues with its herculean task, with doctors of all departments—medicine, surgery and anaesthesia, working together 24x7, to stabilise, investigate and manage all emergency patients. With four operation theatres running, all beds full and more waiting for admission, the work at the EMS, continues non-stop. Crowded government and municipal hospitals and a dearth of beds has been a reality for decades; but those who did not need these services never knew or cared. 
     
    With COVID-19, and the fear that anyone infected may be taken to a government facility, you see a hue and cry on social media over videos leaked to sensationalise the issue. 
     
     
    With COVID-19, the number of admissions has increased exponentially. This further overloads the already over-worked EMS, leading to approximately 16 patients being admitted in a space meant for four persons. Yet, every time there is a challenge, it is the Sion Hospital that rises to face it – the hospital is also adding 200 beds to its already overstretched capacity. 
     
     
    The Golden Rule at the hospital is “Never say ‘No’ to anybody”.  Sion Hospital never refuses admission, unlike private hospitals, which turn away patients, when full.  It has always made it a policy to accommodate everybody and that requires medical attention. Most often, the patient does not complain, they are relieved to get admission and wait for a bed to become available. 
     
    The number of patients has skyrocketed due to COVID-19 (today’s figures are not available). Yet the doctors continue to work relentlessly, with no fuss, with whatever space and facilities are available and silently fulfil their duty to society.
     
    P.S: A total of 1,075,871 patients had been treated at the EMS, till May 2019, including 1,72,188 major emergency surgeries.
     
    (Dr Neela Patwardhan, an ophthalmologist is an alumnus of Sion Hospital and Dr Shanti Pantvaidya is the former HOD Anaesthesia, Sion Hospital)
     
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    COMMENTS

    m.prabhu.shankar

    6 months ago

    Excellent

    shetyerb

    6 months ago

    Hats off to Sion Hospital and its entire staff and Doctors right from the Dean to Doctors, Nurses, Wardboys and other staff.
    Down with MEDIA who do not understand what they are talking about.

    emaillb55

    7 months ago

    Soon hospital has always stood up to every challenge thrown at it. The doctors and all the staff have been overworked since years. Now they are even more so in the prevailing pandemic situation. Kudos to them for serving their patients as always. May God keep them healthy and fit.

    neela_iyer05

    7 months ago

    Busiest Sion hospital where all doctors both Senior most and junior most working very hard way normally also, has multiplied many times these days due to CORONA. Alarming levels of work done by our doctors & paramedical people .Wish our people long healthy life for their endeavors !

    pmbhate

    7 months ago

    Koti Koti Pranaam

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