Policy Watch: Growth with Employment – March 2020

This issue of Policy Watch observes the contemporary issue of the impact on growth and employment of the Covid-19 pandemic. We begin by reproducing a brief article from The Guardian, summarising the impact of Covid-19 on the global economy. Moody’s has already indicated the likely implications on the global economy: a degrowth of 0.5%. It has also reduced the growth forecast for the Indian economy to 2.5% per annum for 2020–21.

The first article by Dr. Amirullah Khan, Senior Visiting Fellow, RGICS, looks at the economic pressures due to the Covid-19 pandemic and its impact on incomes and jobs. He specifically focuses on youth unemployment, which was already at a historic peak even before the pandemic, and on migrant workers who have suffered greatly due to the pandemic.

The second article deals with the agricultural situation and farmers’ plight. It has been contributed by Dr. Rajaram Tripathi, who is a very successful farmer engaged in growing medicinal and herbal plants in Kodagaon, Bastar, Chhattisgarh.

The third article is by Pravesh Sharma, former IAS officer and MD of the Small Farmers’ Agribusiness Consortium. It gives suggestions on how to keep the agriculture sector going during the pandemic.

The fourth article is by Vijay Mahajan and gives suggestions to address the problem of farmers, the agricultural sector, and informal sector workers. Due to the urgency of the matter, this article was released on 24th March 2020 and sent to government decision-makers.

We also reproduce a statement on the issue dated 25th March by the former Finance Minister Shri P. Chidambaram. On 26th March, the Finance Minister, Nirmala Sitharaman, announced a ₹1.7 lakh crore package for the poor. On 27th March, the RBI Governor announced a ₹3.74 lakh crore package to ensure sufficient credit supply by banks to agriculture, industry, and business to keep the economy going.

To enable banks to do so, the RBI announced a number of liquidity support measures. We also carry excerpts from an article by Ajay Vir Jhakar assessing the adequacy of the measures announced.