How can Indian economy bounce back post lockdown?
The Covid-19 situation has shown us that there exists a huge potential for Make in India. For instance, out of 75,000 ventilators that are required, 60,000 are being produced domestically. There has been an exponential growth in the production of personal protective equipment and also testing kits. Six Indian companies are in the global race to develop a [Covid-19] vaccine.
You are now seeing instances where auto manufacturers are producing ventilators, sanitary napkin manufacturers are producing surgical masks and sugar industries are manufacturing hand sanitisers. There is absolutely no dearth of innovation in India, and going forward, businesses must not only innovate but adapt to the changes in demand that have been brought about by this crisis. In particular, we must focus on making India a global manufacturing hub and move from low-value, high-volume product exports to high-tech and high-value exports.
How are we positioned to face this?
We are relatively better positioned as compared with many other countries. The [Covid-19] impact is being felt globally. As per the International Monetary Fund (IMF), the cumulative loss to global GDP is estimated at $9 trillion, which is greater than the economies of Japan and Germany combined. However, a contraction for the full year is not expected in India. As per the IMF, India is estimated to grow at 1.9 per cent this year, the highest growth rate amongst the G20 economies. This is in contrast with world GDP which is expected to contract by 3 per cent. In fact, most agencies such as the World Bank, Goldman Sachs, and The Economist Intelligence Unit are all projecting a slowdown for India, but not a contraction for the year 2020-2021.
The IMF is projecting a “V-shaped” recovery across the world. As per IMF figures, India is expected to show a sharp rebound, growing by 7.4 per cent in 2021-2022. Having said this, we do recognise that some sectors are particularly affected—aviation, tourism, surface transport and hospitality. We will have to make extra efforts to bring them back on track—work for which is already underway.
What will be the “new normal” like, beyond physical distancing and sanitisation norms?
The new normal, in addition to physical distancing, wearing of masks and sanitisation, for me, includes innovation, adaptability and collaboration to develop domestic solutions to the challenges that have resulted from Covid-19. Businesses must tap into the innovative skills of the public, and the business, in turn, should be supported by the government through suitable reforms and policy frameworks. We must leverage the availability of a very young and skilled population, and thereby lead the process of global recovery. We should look at sunrise areas of growth—electric mobility, lithium-ion battery manufacturing, AI and genomics.
In which areas does India have an advantage right now?
There is immense scope in sectors such as mobile manufacturing, pharma, medical devices, textiles, auto components, food processing, advanced battery technologies and telemedicine.