Explained National

Why PM Modi Believes the Indian Economy is Reviving Fast Amidst Pandemic and His Promise on the Vaccine

Prime Minister Narendra Modi has given an interview to The Economic Times in which he spoke at length about India’s handling of COVID-19, the economic situation, recent reforms, farmers’ issue and more. Here are the key takeaways, a quick digest of the detailed interview.

On COVID-19

“India has taken a science-driven approach in response to Covid-19 pandemic. As this was the new virus, our response evolved as the days progressed. But the early lockdown played a pivotal role in controlling the spread and India also got the unlock time right. The data from August and September validate this. But as said in recent address to the nation ‘Jab tak dawai nahin, tab tak dhilai nahin.’

Some of the biggest learnings from the pandemic phase are that the validation of technology and means like Direct Benefit Transfer that helped poor even during this one-in-a-century kind of pandemic. Another learning is about the behavioural change our people able to adopt during crisis.”

On Handling the Economic Challenge Posed by the Pandemic

“There is no meaning in perceiving government and people differently in this battle. So, we first instilled awareness and enthusiasm to fight the battle among public through exercises like Janata Curfew.

Even when most of the experts and newspapers were asking the government to release an economic package for the corporate sector, our focus was to save lives among the vulnerable populations. We announced PM Garib Kalyan package to alleviate the sufferings of the poor people, the migrants, farmers.

It is followed by the Aatmanirbhar package. We made use of this crisis in introducing reforms that were waiting to happen for decades but no one earlier took the initiative. Reforms across sectors such as coal, agriculture, labour, defence, civil aviation and so on have been undertaken which will help us get back on the high growth path that we were on before the crisis.”

On Farmers

“We have gone about reforming the agriculture sector step by step in the past six years. So what we have done today is one piece in the chain of actions that we started in 2014. We also hiked MSPs multiple times and in fact, we procured many times more from farmers at MSP than earlier governments did. Both irrigation and insurance saw huge improvement. Direct income support was ensured for farmers.”

MSP payment to farmers for paddy has gone up by 1.5 times, wheat by 1.3 times, pulses by 75 times and oilseeds by 10 times during the last five years compared to five years of UPA-2 (2009-10 to 2013-14). This proves the lie and dishonesty of those who are spreading the canard about MSP.”

Labour Reforms - On criticism that Laying-off Employees Became Easier

“India was suffering from a twin problem: Our labour laws were such that most workers did not have any social security. And companies did not want to hire more workers for the fear of labour laws, which disincentivised labour-intensive production. The inspector-raj system and complicated labour laws had a strong deterrent effect on employers. We need to come out of the mindset that industry and labour are always in conflict with each other. Why not have a mechanism where both benefit equally? Since labour is a concurrent subject, the law gives flexibility to state governments to modify the codes further as per their unique situation and requirements. The right to strike has not been curtailed at all. In fact, trade unions have been conferred with a new right, enabling them to get statutory recognition.”

On Criticism That States Are Not Getting Support of Centre in Revival

“It’s important to remember that the Centre-state relationship is not limited to GST. Despite the pandemic and the fall in gross tax revenue, we have provided enhanced resource transfers to states. Between April and July, the sum total of devolution of taxes plus grants-in-aid to states, including centrally sponsored schemes, increased by 19% to 4.06 lakh crore from 3.42 lakh crore in the same period last year. In short, while our revenues fell, we sustained the flow of funds to states.”

Indications of Getting the Growth Back

“The trend in agriculture which is of a record production and record purchase — are going to inject significant income in the rural economy which will have its own virtuous cycle of demand.

A record high FDI inflows even amidst the pandemic indicate India’s growing image as an investor friendly country.

Auto sales along with tractor sales are either reaching or surpassing previous year level.

A steady recovery in the manufacturing sector helped India climb two notches to the third position among key emerging markets after China and Brazil in September.

In terms of new net subscribers of EPFO, the month of August 2020 registered a 34% jump compared to July 2020 with addition of more than a million new subscribers. This shows that the job market is picking up.

Key indicators of economic recovery like railway freight traffic increased by more than 15% and power demand by 4% in September over the same month last year.”

On Vaccine

“I would like to assure the nation that, as and when a vaccine becomes available, everyone will be vaccinated. None will be left behind. Of course, initially we may focus on protecting the most vulnerable and the frontline workers. A National Expert Group on Vaccine Administration for Covid-19 Vaccine has been constituted to chart the way forward.”

Share