Santosh K Mehrotra, Professor of Economics at the Centre for Informal Sector & Labour Studies at Jawaharlal Nehru University and author of the recently released book Reviving Jobs: An Agenda For Growth said the current reverse migration has set the country back by 15 years, and worried that the financial stimulus package announced by the federal government is small compared to the package rolled-out by then Manmohan Singh government during the 2008 crisis.
How prolonged will be the financial impact of this extended lockdown and do you see the workers who left the cities returning anytime soon?
I see a long financial and migrant worker impact. I don’t see them streaming back in a rush. The injury has actually been far too great. There are many reasons that they left– bad living conditions here, over night loss of livelihood, no social security and so on. They will not return in a hurry and associates with your larger question on the revival of the economy; for the very first time in decades, India’s economy will contract in FY21, and revive in the latter half of FY22(as RBI has actually confessed). Also, we were in a recession even before the pandemic started.
But before we arrive, you need to appreciate the contrasting economic circumstance prevailing in the last quarter of 2019 prior to the pandemic, and the pre-2008 crisis circumstance. Prior To 2008, all engines of development were shooting.
Our investment-to-GDP ratio was at an all time. GDP development was 8-9%per annum and since of that the job development was extremely rapid. We had five million unskilled employees leaving agriculture for the first time in Indian history because non-agri jobs were growing.
Is the stimulus revealed by Financing Minister Nirmala Sitharaman strong enough to bring the economy back on track?
A straightforward answer is no. Prior to I answer this we need to see what hap