The Indian Economic Journal

The productive sectors—agriculture, industry and services—are pillars of growth and enablers to the dream of India’s US$ 5 trillion economic target. The collective growth and contribution of these productive sectors have exhibited dynamic patterns in the history of Indian economy attracting attention of researchers and policy makers. The investigation of the growth trajectory of these productive sectors aligning with US$ 5 trillion GDP objective becomes more important at the challenging time of unprecedented COVID-19 pandemic and subsequent nation-wide lockdown in the economy. This study investigates the economy’s and sectoral growth trajectory considering the disruption caused by pandemic and answers the pertinent question: ‘Will India attain its dream of US$ 5 trillion economy, if yes, when and how?’ The results of empirical analyses reveal that India will join US$ 5 trillion club by 2027–2028, 3 years later than the original target of 2024–2025. This growth trajectory requires that the productive sectors be bolstered consistently by reforms and stimulus and thereby they exhibit recovery post-COVID-19.

JEL Codes: A20, C01, C54, E20, O47

This article attempts to construct an extremely rudimentary framework to argue that the long-term losses from the pandemic shock are likely to far exceed the short-term one. In the simple structure presented here, output depends on labour force, efficiency that is determined by past nutrition levels and capital accumulated from the past. The immediate effect of the pandemic is to lower the effective labour size, principally due to lockdowns to prevent or delay the spread of the pandemic. The other two factors cannot be affected. However, the decline in present output is likely to lower both the efficiency of labour and the future capital along with the labour supply in the future, thereby causing a greater impact on future output.

JEL Codes: I15, J11, J21

The onset of the COVID-19 pandemic has presented India with complex economic and public health challenges. Furthermore, these two crises interact with each other in unpredictable ways whence there is considerable uncertainty in designing a policy response. This article purports to place India’s experience with the corona virus with a cutoff date of 30 June 2020 in perspective and to examine the public health and economic challenges as well as the economy’s prospects in a post-COVID world. The article lists key dates in the development of this pandemic in India and globally. We then outline the economic and health strategies followed in India to combat the crisis. We further discuss some consequences of the pandemic and elements of India’s recovery strategy. We also assess elements of India’s recovery. Finally, this article discusses prospects for the Indian economy in the short run.

JEL Codes: I15, I18, O11, O40

The paper focusses on one of the aspects of the Covid-19 induced economic crisis in India .i.e., the consumption demand for non-essential commodities which is an important component of the overall aggregate demand. As the number of Covid-19 positive cases are swelling up and lockdown is being phased out, this study, based on the primary survey of 900 plus individuals across various states, age, income and occupation groups in urban areas, has attempted to ascertain the consumer sentiment so as to predict the changes in private consumer spending during the current financial year on various items once the lockdown is completely lifted. These items include those that were ‘planned’ for during the year (for instance, electronics, real estate, automobiles, domestic travel) as well as ‘discretionary’ spending on retail and e-commerce, wellness and hospitality services. The survey responses have been used to determine the timeframe of recovery for each sector through econometric analysis of the deferment in the expenditures for each sector.

This article has set out to understand why a large number of public–private partnership (PPP) projects delayed stalled and terminated in the largest PPP program in India. Based on quantitative and case-study-based qualitative research, this study finds that the incomplete nature of PPP contracts, uncertainty and information asymmetry leads to adverse selection, moral hazard, opportunism and holdup of the PPP projects. The inefficacious and inequitable allocation of risks among stakeholders and lack of contract management skills in project authorities exaggerated the problems, and the final outcome is a large number of failed projects and no participation from private developers in future projects defeating the very purpose of adopting the PPP model to build public infrastructure. This study proposes a 20-point conceptual institutional framework suggesting policy and project-level measures for effective execution of the future PPP program in India and developing countries with similar socioeconomic environment post-COVID-19 pandemic amid recessionary conditions.

JEL Codes: E6, H5, N7, O2, R4

India has gradually increased its testing capacity of COVID-19 by mid-September 2020. However, the level of testing is substantially low in comparison with many high- and middle-income countries. Evidently, the pandemic in India is likely to be prolonged and affect millions in comparison to other countries, due to its huge population size. The possibility of a sudden upsurge of infections may turn overwhelming, jeopardising the health system, if an appropriate testing policy is not immediately adopted, given that the public health expenditure capacity of India has remained at a suboptimal level. Against this backdrop, a descriptive analysis has been carried out using the published data of the number of infections, tests and daily COVID-19 cases and public health expenditure data published by different sources and available in the public domain. The analysis suggests that a differential strategy is required to deal with the situation, which varies across states and depends upon the health spending capacity of individual states and their population size, among other factors. The specific strategy recommendations would be as follows. First, the testing rate should not be too high or too low, and this can be assessed using a marker: marginal return on testing. Second, India should follow the upper-middle-income-country standard in assessing the testing rate. Third, as a long-term strategy, there is a need to strengthen the public health system to avert a future catastrophe in the form of such pandemic.

COVID-19 has traumatised the whole world in every aspect ranging from normal day-to-day activities to complete halt of the economies. This piece of work attempted to examine the response of the stock markets to the outbreak of COVID-9 by considering stock indices of five leading countries and comparing the risk with other periods of crisis viz. global financial crisis of 2007-2008 and stock market fluctuation in 1992. Both negative and positive fluctuation are examined, however special emphasis is placed on downside risk. The risk is measured using Value-at-Risk models with different distributional assumptions. The main observation of the study points towards gravity of this deadly virus as the volatility in the stock markets of all the countries is higher even compared to the global crisis of 2008 except China which is quite absurd. On the other hand, global markets are found to be highly correlated in the COVID-19 period. However, investors are also found to be reacting positively when favourable news is transmitted. The findings of this paper will help the investors in understanding the short-run dynamics of the stock markets and use such information in future for investment in similar circumstances.

Jel Classification: G01, G15, I15, G17, G28

The fact that labour in India, in the context of the COVID-19 pandemic, has been trapped in an unprecedented crisis, in living memory, is widely acknowledged. The employment and livelihoods of the overwhelming majority of workers have taken huge hits, and a massive uncertainly continues to loom over their immediate foreseeable future. This article focuses on how the world of work in India has been impacted by the pandemic, and it seeks to investigate the ongoing challenges. However, the massive vulnerability of workers in the country, which has been brutally exposed in the current crisis, did not emerge overnight and needs to be situated against the backdrop of the so-called economic reforms, in particular those during the preceding 6 years of the current dispensation at the centre and its (mis)management. This is done in the first substantive section of the article, although very briefly. The second substantive section takes stock of the current conditions of the world of work, exacerbated by the pandemic, as it continues to evolve. The challenges confronting India’s working people at the current juncture are enormous, to say the least, but the ruling dispensation, at best, appears to be indifferent to their lives. We close the article with some concluding remarks and immediate policy pointers.

JEL Classification: J21, J23, J46

This study explores the impact that COVID-19 and its preventive measures would have on the plantation sector, covering four important crops—tea, coffee, rubber and cardamom. The study traces the channels through which the pandemic and the lockdown measures would impact the sector. These channels are the disruptions in seasonal operations, in factor and resource supplies; transport, storage and processing; marketing and sales; and demand conditions. These disruptions get manifested in price, quantity and revenue. These are estimated for the four crops separately. The total unrealised revenue due to the lockdown is estimated to be ₹38.4364 billion for the lockdown period from 24 March to 31 May 2020. This does not include the losses that are to be incurred due to the demand decline, supply chain disruptions and price fall that is to be manifested in future. This massive economic disaster is bound to have a severe impact on the plantation economy, especially the small growers and the labourers. Urgent measures need to be taken up to arrest the losses and revive the sector. Yet there is very little in the ‘Atmanirbhar Bharat’ package that would help tide over this economic crisis. Immediate measures aimed at demand rejuvenation, arrest of price fall, restarting of plantation operations and restoring of supply chains is called for. The vantage point of the commodity boards must be exploited to reach out to the stakeholders.

JEL classification: M38, Q11, Q13, R11

This study examines the performance of Indian textiles exports in a relative and holistic framework. Given the pre-eminence of the sector for India’s exports, a comparative study on its performance is called for. For the purpose, India’s key competitors in the export product categories are deduced. The primary objective of this study is to critically assess the Indian textiles exports performance using the export similarity index (ESI). Overall, the study arrives at some important conclusions with regard to this objective using the ESI for the textiles product codes HS 56–60 for the period 2013–2017. In view of the much-needed scope for improvement in the Indian textiles exports performance, there is a need to evolve a comprehensive export strategy for the sector, involving both firm- and state-led efforts so as to have a beneficent impact on exports and the overall Indian economy.

JEL Codes: F10, F14, L67