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This week’s news bulletin talks about Atma Nirbhar Bharat and a possible new stimulus package to revive the economy. We also look at cryptocurrencies and their reemergence. Finally, we take a sneak peek at Harley’s exit in India and Hero gaining the rights to market the brand. Check out these highlights now!
The Indian economy has been in the doldrums recently. We have been hearing about rapidly dropping GDP growth, massive unemployment, a demand gap created because people are not spending as they usually do, and so much more. All of it paints a dreary picture. Or at least that was the case till September 2020. Because reports have been pouring in on how the economy is finally seemingly rising out. There’s finally, talks of the contracting economic condition getting a relief due to spending finally increasing.
While speculations are rife as to why this sudden influx of positivity, many claim that the lifting of the lockdown has enabled people to step out and spend more. But is it enough? Will our economy be back to positive GDP growth and a stable job market? Is the Indian economy truly going to rise out of this slump? How has the government dealt with it? Well to start out, remember Atmanirbhar Bharat? The stimulus package introduced by FM Nirmala Sitharaman? In the middle of the lockdown, a 20 lakh crore economic package was meant to help the ailing economy along. Come October, the FM once more announced a number of measures to induce government employees to spend including the LTC cash Voucher Scheme and a Special Advance Scheme. On the coattails of this, came the announcement of measures to boost consumer demand and provide liquidity to states. And now finally, Monday this week, the FM stated that there is a possibility of another stimulus package to aid the economy. This announcement comes keeping in mind the fact that despite spending picking up, it could be a festive affair only. Besides, the 1st economic stimulus has already ended. Also, businesses are still not confident of being back on track. Read this ET article to understand how and why a stimulus package will impact the economy.
Well, no matter what subject you’re specialising in, the economic state of the nation is similar to a GK question that you’ll be expected to answer during GD-PIs. For that reason, let’s first understand the concept of an economic stimulus package.
A stimulus package is a package of economic measures put together by a government to stimulate a struggling economy, according to Investopedia. Sounds simple enough. The government, earlier in 2020, announced the Atmanirbhar Bharat package that included various recessions and relief measures for a cash strapped populace. The idea was to become a self-reliant nation, especially with the threat of COVID hanging over our heads. The vision? That goods and services, infrastructure, tech, as well as demand were all sufficiently created and satisfied by Indian firms and people. After the Swadeshi movement initiated by Gandhi, this “Make In India” reimagined was aimed at creating an Indian monopoly at least within India. This package provided succour to migrant workers and labourers, had a loan concession for MSMEs, and lots more interesting schemes that did help people across different demographics. On the other end, the Atma Nirbhar scheme did not devote a significant economic stimulus to the research and development community in the country. This shows that while the stimulus package did have a positive effect, it also did not succeed at fulfilling its promise of a self-reliant nation.
A new stimulus package, while likely to have similar effects, may also help certain sections of the Indian economy. But will it be enough? Will it help pull us out of this lockdown induced slump, even after the festive season is over? According to Kaushik Basu, Professor of Economics at Cornell University, India’s economic growth has been on a downward trend since 2016. The IMF, he shares, is forecasting roughly minus 10% growth for India this year. That is the worst recorded growth in independent India, despite or maybe because of the COVID slump. He talks about policies that need to be implemented to revive the economy, and why these matter in the long run.
What do you think? Do you think India needs a policy shift to get back to positive growth? Do you think a new stimulus package is the need of the hour? Tell us your thoughts and opinions in the comments section below!
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Analysis of Project Atmanirbhar Bharat
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Cryptocurrency sounds even more fantastical and imaginary than real money. But people have managed to mint a fortune by trading in these. At least until 2018, when these were banned in India. There was a general lack of trust amongst buyers and sellers as to crypto investments. Come 2020, this attitude seems to be slowly receding. In India, not only has RBI’s 2018 ban been reversed by the Supreme Court through a ruling in March 2020 but also the country’s famously conservative banking system is making nascent forays into the crypto space. If you’re an MBA student, knowing about the reemergence of cryptocurrencies, especially during this pandemic, is an interesting study in how crises become opportunities!
All those in love with long rides, long roads, and a bike journey felt heartbroken when famous biker brand Harley Davidson announced that they will shut shop in India. But wait. Don’t cry just yet. Because while Harley did officially exit India, they handed over the reins to Hero Motocorp. Which means Hero will be selling Harley products across India still! A sweet spot for Hero and all Harley loyalists, this. Read full details about what rights Hero possesses for championing the Harley cause in India in this article.