Socio-economy, supply chain, geo politics to change post COVID-19, says Sanjeev Sanyal

Principal Economic Adviser Sanjeev Sanyal on Friday said that the socio-economic situation, supply chain, and geo-politics will not remain the same after the world comes out of the coronavirus crises.

In a tweet, Sanyal shared his view that the world may not return to the pre-COVID situation.

Outlining India's approach towards to the economic fallout of the coronavirus crisis, he wrote: "An important consideration for the post-Covid reconstruction is that we will probably not be returning to the pre-Covid world. The socio-economic, geo-political, technological, supply chain, global governance architecture will be different."

He also said that Indian should engage actively in creating this new world and added that it cannot be done in a defensive manner.

"We need to take risks - not just business risks - more broadly in terms of how we respond as a people to the emerging opportunities (and problems) of this new landscape."

In another tweet, Sanyal said that the government and the Reserve Bank of India (RBI) is taking steps to support the economy in a phased manner. He mentioned that the government would also have take some liquidity and other measures for the reconstruction of the economy post the crisis.

He said that India has deliberately opted by a step-by-step feedback loop based approach that is different from the big-bang approach of some other countries.

"The step-by-step approach does not mean government/RBI does not recognize the seriousness of the situation or is unwilling to do big things. Remember, we will need some ammunition for the post-Covid reconstruction - hopefully not far away if we manage the health situation," the Principal Economic Adviser to the Finance Ministry said.

Sanyal said that the country is dealing with an an uncertain evolving situation and for the economic crisis, the government will first provide cushion for the worst case and then respond according to new information.

The same would be the procedure in terms of health, he added, first the lockdown and then identify the problem areas followed by a systematic opening.

The government and regulatory bodies including the RBI have in the past one month announced a number of measures to support the common man, under privileged, businesses and the economy.

On Friday, central bank Governor Shaktikanta Das announced a fresh slew of measures to infuse liquidity in the system including reduction in the reverse repo rate by 25 basis points.

The government is also preparing a stimulus package for the industry which is expected to be announced soon.