The Indian economy survived the pandemic COVID-19’s beatingswith the unorganized sectors’ workforce being the worst affected. However, thenation is being unlocked and the think tanks are now focusing on recovery andgrowth.
The experts are debating if the country will see a V-shaped,U-shaped, L-shaped, W-shaped, or K-shaped recovery.
Though the RBI Governor Shaktikanta Das disagrees about theimportance being placed on shape and claims that it is the speed of recoverythat will be more important. He gave the analogy of a cricket match toestablish the fate of winning team under a three speed process.
So, the first to drive Indian economy on the recovery pathwould be openers in the form of labour intensive sectors that have shownresilience in the face of pandemic. The next would be set sectors that are'striking form' and gradually recovering and contributing to growth and lastlythe 'slog over' sectors that are most impacted by the pandemic but have the potentialto bring about big change and 'rescue an innings'.
Presenting the outcome of the monetary Policy Committeemeeting on Friday, Das said, in his view, India will get predominantly a three-speed recovery, with individual sectors showing varying paces, depending on sector-specificrealities.
"Sectors that would 'open their accounts' the earliestare expected to be those that have shown resilience in the face of the pandemicand are also labour-intensive," Das said.
Agriculture and allied activities; fast moving consumergoods; two wheelers, passenger vehicles and tractors; drugs andpharmaceuticals; and electricity generation, especially renewables, are some ofthe sectors in this category .
In several of these areas, reforms such as in agriculturalmarketing and value chains encompassing cold storage, transport and processing;changes in la bour laws; and creation of capacity for production anddistribution of vaccines have already opened up new vistas for fresh investmentto step in.
The second category of sectors, according to Das, to 'strikeform' would comprise sectors where activity is normalizing gradually. While thethird category of sectors would include the ones which face the 'slog overs',but they can rescue the innings. These are sectors that are most severelyaffected by social distancing and are contact-intensive.
According to the RBI, the economy is on recovery path andgrowth could become visible from the fourth quarter period. Irrespective of theshape of recovery, restoring the health of economy and sectors would be closelywatched.
For the year 2020-21 as a whole, therefore, real GDP isexpected to decline by 9.5 per cent, with risks tilted to the downside. If,however, the current momentum of upturn gains ground, a faster and strongerrebound is eminently feasible, the RBI said.
(With inputs of IANS)