Sustainable Economy Post Covid: Need of a long-term Strategy

If we think about the experience of the past few months, the economic recovery is going to be a distant dream. Rebuilding in India needs time and money. The world economy is in downturn and it is predicted to be more destructive and disappointing than the Great depression of 1929 and the global economic crisis of 2007.In India, millions of the people have lost their jobs, and the economy is projected to fall down by 4% in 2020-21. The last time there was a contrast in the Indian economy of more than 5% was in 1979 when the entire country was devastated by a once in a century drought and floods. A significant feature of the present economic calamity is the unparalleled fiscal and monetary stimulus packages being rolled out by the governments to provide relief and revive the economy. According to the International Monetary Fund(IMF), the total stimulus package for G20 countries are an average of 12 % of GDP. India too has announced a stimulus package worth 10% of GDP.A cursory analysis of the stimulus packages shows that they are mostly targeted to recuperate the current economy. In fact, barely   any country has thought about the long-term transition. In India, too has, the focus is on the existing ‘brown economy’ and shovel-ready projects. The attention on the immediate crisis has also relegate climate and environmental concerns to the background. This is evident in the increasing plastic pollution and investments in the fossil fuel industry. Regulatory changes in the environment and labour sectors have also been proposed for the ese of doing business. While there is nothing wrong in short-term stimulus packages to keep the current economy alive, they must not be environmentally destructive. On the other hand, we also have to ensure that the long-term economic recovery takes into account the social and environmental crisis the world is facing today. In other words, we must differentiate between a short-term stimulus to jumpstart an economy and a longer-term strategy to transition to a sustainable society. While the former mostly requires fiscal and monetary support, the latter requires long-term investments and serious pricing and policy reforms. The current economic crisis gives a lifetime opportunity to roll out a long-term strategy along with stimulus packages in core sectors. Firstly, to make agriculture sustainable: agriculture is central to building a sustainable society. Secondly, transform the energy sector: We are at a point of change in the energy sector. With stimulus and R&D, we can shape a new energy architecture based on renewable electricity, battery storage, smart grids and hydrogen fuel for industries. Thirdly, build resilient infrastructure: Massive amount of money will be spent by the government to build roads, airports, buildings etc. as part of the stimulus package. We must make them green Instead of roads, we should priorities railways; instead of concrete jungles, we must build sustainable cities. Fourthly, invests in nature: reversing deforestation and desertification and enhancing soil, wetlands and forests will build resilience against climate change and also provide massive livelihood opportunities. Fifthly, support local and small business: For jobs, sustainability and resilience of the supply chain, local small business are going to be the key. Government policies must support the development of efficient and green small business. And the last but not least, invest in social capital and governance: None of the above would be possible without an educated and healthy society and good governance. If the Government want to push the country in the elite group of the developed countries, the above mentioned steps are necessary to take. Actually, these are the  need of the time.

Dr. Sanjay Kumar Pandey, Associate Professor & Director – CCJR, Unitedworld School of Law (UWSL)

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