Manmohan Singh's "three steps" to stop the economic crisis in India

 

Its former Prime Minister Manmohan Singh said India must take three steps "immediately" to stop the damage caused by the coronavirus pandemic.

Dr Singh, widely seen as the architect of India's economic reforms program and now a prominent leader in the main opposition Congress party, spoke to the BBC this week in an email exchange. The coronavirus pandemic has ruled out a face-to-face interview and Dr Singh has refused to make a video call.

During our conversation, he laid out three steps that he believes the government should take to stop the crisis and restore the normal economic situation in the coming years.

First, the government should "ensure that people's livelihoods and ability to spend are protected through substantial direct cash assistance."

Second, it must provide adequate capital to companies through “government-backed credit guarantee programs”.

Third, it must reform the financial sector through 'independence and institutional processes'.

India's economy was already in the midst of a slowdown prior to the start of the pandemic - GDP grew 4.2% in 2019-20, its slowest pace in nearly a decade.

 The country is now gradually unleashing its economy after a prolonged and grinding lockdown, but the future appears uncertain as the numbers of injured rise. On Thursday, India became the third country to present 2 million Covid-19 cases.

Economists have since warned that India's GDP for the 2020-2021 fiscal year is likely to contract sharply, leading to the worst technical recession since the 1970s.