Dr Rangarajan, says there is hope for a 9% growth in GDP
The focus has shifted back to basics as the states now lift lockdown restrictions, after an exhausting second wave of Covid-19. The main questions that are being asked are concerning the adherence to Covid-safety protocol, tracking the new variants of the virus.
Questions are also being asked about the scale up to which the vaccination drive can be ramped that most experts have been seeking for several months now and running parallel would be the nature of government expenditure and the impact it can have on the ongoing healthcare needs but also stimulate economic activity.
The primary concerns are on the scale to which people will presently obey the pandemic safety measures, any laxness here could have a lasting effect; what impact the Delta-plus variant is likely to make. The Delta variant is a matter of substantial distress. The vaccination rate in the country and the government expenditure to back these protocols would also play a vital role.
Dr Rangarajan, economist and former governor of the Reserve Bank of India (RBI), has been closely studying the impact of the pandemic on the Indian economy and has strong reasons to believe that it is possible to not attract the third wave and the magnitude to which government expenditure can be increased and sustained will play a crucial role in stimulating the economy; and we need to prepare for possibilities.
The government should prepare a budget that includes the expenditures already be incurred and additionally include Rs 1 lakh crore of expenditures for vaccination and other healthcare-related expenses.
Aided by relaxation in lockdown curbs, this can assist in reaching a GDP growth of close to 9 per cent 2021-22.