The economies have come a long way from the first spread of the COVID-19 pandemic in December 2019 to the emerging waves in 2023. We are better capable of handling the spread now with improved health care systems, availability of vaccines, quick government, and Central Bank accommodative responses like the announcement of stimulus packages and reduction in interest rates to spur investment and tackle dwindling growth.
However, there are certain pressing issues that the economies are facing now that were not in place in 2019. The global supply chain that was disrupted during the first wave is still a challenge due to the recent geopolitical tensions like the Russia-Ukraine war & China’s growing dominance in Hong Kong & Taiwan.
The expansionary monetary and fiscal policies adopted after the spread of the pandemic have been able to help people survive and economies grow. However, gradually it has also brought in inflation necessitating the central banks to act swiftly and tighten the monetary policy.
As a result, the currency values have also been depreciating with capital flight thereby hampering economic growth. Amidst all these challenges, the Omicron subvariant started spreading fiercely in China followed by its spread in other countries[1].
Certainly, all the stakeholders in Bharat are better equipped now to deal with the further waves of the pandemic. Therefore, we are unlikely to experience hardships like the migrant crisis and queueing up at ration shops for hours. However, the new challenges can make the task of curtailing the spread even more difficult.
Also, the unemployment rate is rising in urban Bharat as per the data made available by the Centre for Monitoring Indian Economy (CMIE). The Current Account Deficit (CAD) has also increased to 4.4% of the Gross Domestic Product (GDP) in the second quarter of 2022-23[2]. This can derail the recovery and growth of the economy and sustainable development can be at risk.
According to the World Bank, the progress made in decreasing poverty was reversed due to the spread of COVID. Hence, the vulnerability to poverty may again worsen and increasing inequalities will bring in more social unrest. Furthermore, if work-from-home is not adopted, at least in the services sector, for the time being, the XBB 1.5 variant may spread more rapidly. This variant has caused hospitalizations in New York[3].
With elections around the corner, if safety instructions are not followed during rallies, it is very likely that the avoidable will become unavoidable. Though 90 percent of the adults are vaccinated, and it is said that Bharat should not be concerned unless a completely new variant lineage is discovered, prevention is always better than cure.
Bharat earned goodwill during the first wave of the pandemic by producing and making available vaccines in large volumes to many countries. It is currently holding the Presidency of G20 and so has the potential to lead the world and enable economies to curtail the spread of the new variant in a better manner. These timely moves can surely enable Bharat to be one of the top 3 countries in the world in the future.
-by Dr. Shilpa Deo
[1] https://www.businesstoday.in/coronavirus/story/what-is-omicron-xbb15-india-gets-its-first-case-of-xbb15-thats-spreading-fast-in-us-358433-2022-12-31
[2] https://economictimes.indiatimes.com/news/economy/policy/budget-2023-former-rbi-governor-raghuram-rajan-dreads-more-tariffs-by-the-modi-govt/articleshow/96642469.cms?utm_source=whatsapp_pwa&utm_medium=social&utm_campaign=socialsharebuttons&from=mdr
[3] https://www.timesnownews.com/india/first-case-of-xbb-1-5-variant-responsible-for-new-york-covid-hospitalisations-surge-found-in-gujarat-article-96634710
