ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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COVID-19 and the Sri Lankan Economy

COVID-19 has been rapidly spreading across the globe, taking thousands of lives and bringing hundreds of economies to a standstill. Its initial impact on China’s economy and China’s consequent slowdown may have adverse economic impacts on the rest of the world as well. This article examines the impact of COVID-19 on the Sri Lankan economy, focusing on the sectors such as national output and employment, tourism, exchange rate and financial market and social and welfare.

The Indian Economy

Deadly and frightening as it appears, it is still too early to estimate the severity of India’s Covid-19 second wave. Unlike the transatlantic countries where it appears to have peaked, India’s second wave is still trending upwards. While the second wave is more devastating, India’s unpreparedness is evident. India needs to recognise that such pandemics will come again. It needs to diversify and secure its supply chains, vaccine output, and upgrade its poor healthcare infrastructure. The Indian economy has been badly hit by the pandemic, with one of the highest output losses amongst major economies. One of the possible reasons for this is the limited fiscal support despite a stringent lockdown, with most of the heavy lifting done through monetary measures. Going forward, its economy needs to overcome several challenges before it can return to its former high growth trajectory.

Falling behind the Curve Is Not an Option

India must jettison orthodox economics amidst the pandemic to protect employment and sustain a recovery.

COVID-19: Examining the Impact of Lockdown in India after One Year

One year after its announcement in March 2020, the consequences of India’s strict COVID-19 lockdown measures and ineffective policy responses continue to be felt, be it in terms of livelihood loss and economic downturn or increased marginalisation of vulnerable sections of society.

Union Budget 2021–22: Is Capital Expenditure Enough for an Economic Recovery?

The Union Budget 2021–22 seems to be relying on capital investment-led growth for an economic recovery. But such an approach neglects those sections of the public that were the worst-hit by the COVID-19 pandemic.

How Did Agri-start-ups Fare during the COVID-19 Pandemic?

Although agricultural start-ups in India took a hit due to the COVID-19-induced lockdown, they have enormous potential in aiding economic recovery. A survey of 162 start-ups from 29 states, located in 98 cities, reveals that many start-ups have tailored their products, modified their technologies and invested in their long-term growth potential, even as they suffered from liquidity crunch, lack of investor funds and poor demand. The government should provide capital access, market access support and end-to-end solutions for innovation and marketing towards harnessing the power of these start-ups.

Crumbling Firewalls

Ownership of banks by industrial houses will cost the economy dearly.

Will COVID-19 Change the Landscape of Financing Innovation in India?

The COVID-19 pandemic may affect the financing opportunities for innovation. The revenue loss induced by the pandemic is likely to divert the existing resources in aiding firm survival and economic recovery, with financing innovation taking the back seat. Highlighting the current state of innovation in the country, the rise of the country in its innovation ranking and its existing sources of funding is brought to the forefront. Various avenues presently exist for this purpose and more outlets could be explored to boost the funds for innovative efforts. Experience and policies of other emerging economies can help devise suitable measures that could further enhance India’s trajectory up the innovation ranking.

Post-COVID-19 Challenges in the Indian IT Industry

The information technology industry has been the hallmark of the Indian growth story since the 1980s. The Indian IT sector has relied heavily on non-home markets for demand and resources and built deep global ties using co-location with clients, enabled by international travel and temporary on-site migration, acting as a key mechanism in developing “cognitive proximity.” However, the COVID-19 pandemic is expected to make international travel and migration more restrictive and costlier, maybe for a long time. The paradigm shift creates significant barriers for IT firms to be able to maintain cognitive proximity with its clients and could adversely impact their global competitiveness.

Time for a Massive Fiscal Stimulus

Only bold interventions by the government can ensure a quick recovery of the economy.

Real versus Fictitious

The COVID-19 pandemic is stretching the contradictions of the present economic arrangements to the limits. The system survived inflating financial assets and feeding on inequalities. The divide between the real economy and the sphere of finance cannot be left unchecked without risking an economic catastrophe. Wealth and income inequalities cannot be pushed anymore without irretrievably damaging the underlying social contract. The virus is making change inevitable.

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