Sustaining economic growth in challenging times

The second wave of COVID-19 hit India hard. The sheer numbers of the affected were significantly higher than in the first. Besides, the second wave in 2021 saw panic situations of hospital bed shortages, oxygen deficiency, and non-availability of crucial medicines. The healthcare infrastructure, both public and private, was stretched fully and beyond. Amid this situation, there were reports that the economy had not been as badly affected as during the COVID wave in 2020. Since there are varying reports on the extent of economic damage during the last quarter, more clarity may emerge only over the coming weeks and months.
In any case, the two episodes of the pandemic have brought to the fore the vulnerability of economies around the globe. In India, with its large share of the informal economy and the significant contribution of the micro, small and medium enterprises sectors, the vulnerability was more evident. Large parts of the population, those engaged in these sectors saw livelihoods impacted. However, thankfully, since during the second wave the country did not see any nation-wide lockdown, the blow was softened. While various states and local administrations imposed restrictions from time to time in their local jurisdictions, they also put in place several measures to ease the pain of the common man; highly subsidized food, free rations, and cash allowances to vulnerable sections were some.
Now the emergence of newer variants of the virus in some parts and predictions of further waves of the pandemic are posing new threats. Therefore, it is becoming increasingly clear that the world and its economy must adjust and adapt to a new normal. ‘Work from home’ is one of the elements of this new normal. Workplace practices must include new levels of hygiene, social distancing, and community habits. On the other hand, the informal economy may face more challenges. Cab and auto-rickshaw drivers, laundry services, small restaurants/eateries, malls and shopping centres may find the going tough. Several other occupations may be affected for varying time periods as citizens adapt and adjust by limiting their interactions with others and avoiding crowds. As livelihoods and incomes get impacted, the demand for several goods and services will become more uncertain. Whether we actually encounter further waves and if so, the intensity of these will define the extent of these impacts.
Just as we needed rapid and sustained economic growth across sectors in order to lift many more millions out of poverty, the pandemic has set the clock back and possibly erased some of the recent gains on this front. The effort must be renewed. One, healthcare infrastructure, both public and private, must be beefed up to respond effectively to future challenges. This will call for sustained and accelerated public spending at all levels so that economically weaker sections are also able to avail medical services in time and limit their income losses. Accelerated development and rapid roll-out of vaccines has been a proud achievement. Effective delivery mechanism for vaccination has already been set up and must be strengthened for future needs. Constantly alert local administrations and timely response to newer threats will be key to limiting damage and calls for suitably tweaking organisation structures and processes. The learnings of the recent past will surely aid this. Above all, administration must engage in sustained citizen awareness programmes for preventive measures and appropriate behaviour. Cities then will be able to protect and promote their economies in order to fulfil the aspirations of their growing populations.