Every crisis is an opportunity. While this may be a cliché, the COVID-19 crisis does indeed provide India with an opportunity to reshape the industrial landscape. Given the extent of the damage to the economy from the disruption to business, a mediumterm plan for recovery is the need of the hour.
Unlike in 1991, India does not face a balance of payments crisis. Instead, the country requires to overcome challenges such as non-availability of long-term funds and high cost of doing business. This requires simultaneous reform across both real and financial sectors.
The paper is an attempt to set out some suggestions for actions to be taken in the short and medium-term. In addition to the immediate stimulus which is required urgently to overcome the deep distress in the economy, a medium-term plan is needed to be implemented over two years. This would include not only immediate restructuring requirements to support the economy from the damages inflicted by coronavirus but also prepare for a more competitive economic landscape over the next decade. The first part of the paper sets out the different elements of the economic damage. In the second part, we discuss some suggestions for the short-term stimulus and the medium-term plan.