Govt flattened wrong curve: Rajiv Bajaj to Rahul Gandhi
nNEWDELHI:STRESSING on the importance of a stimulus to boost demand, Rajiv Bajaj, managing director of Bajaj Auto, said in a video conversation with former Congress president Rahul Gandhi that the 68-day lockdown to flatten the Covid-19 curve ended up flattening the “wrong curve” of the economic growth.
He said the lockdown has not been able to check growth of Covid-19, but ended up hurting the economy. “You [the government] flattened the wrong curve. It is not the infection curve, it is the GDP [gross domestic product] curve,” Bajaj told Gandhi.
Bajaj was speaking to Gandhi as part of the series of video conversations with global and Indian thought leaders to discuss the Covid-19 crisis and its consequences on the country’s economy.
According to official data, the economy grew 3.1% in the three months ended March 31, 2020 and 4.2% -- the slowest pace in 11 years -- in the financial year 2019-20.
The lockdown is expected to dent the growth further.
Days after the release of official GDP data, Moody’s Investors Service cut India’s rating by one notch to the lowest investment grade with a negative outlook, citing growing risks that Asia’s third largest economy will face a period of slower growth.
On June 2, while addressing businessmen Prime Minister Narendra Modi voiced confidence in the economy’s ability to return to a path of rapid growth. “Yes ! We will definitely get our growth back,” Modi said in his speech to a conference on ‘Getting Growth Back’ organised by the Confederation of Indian Industry (CII).
The Bharatiya Janata Party (BJP) dismissed Bajaj’s views.
“This is Rajiv Bajaj’s personal opinion and in India everyone is allowed to have one. The government has said that we bought time to build health infrastructure so that we can open economic activity. Today, we have robust structures to combat Covid-19 spread,” said BJP spokesperson Gopal Agarwal.
In the interaction, Bajaj said India’s lockdown strategy was influenced by the West. Despite being an Asian country, India preferred to tackle the situation like the developed West, instead of looking at what was happening in the East. Bajaj gave examples of Japan and Sweden, where measures such as sanitisation, masks and social distancing were followed, but where the countries kept the wheels of economy turning. “...India not only looked West, it went to the wild west. I think we stayed more towards the impervious side. We tried to implement a hard lockdown which was still porous,” he said.
India lifted many restrictions on June 1 and has said even more would be opened up by June 8.
Bajaj also urged PM Modi to spell out how the country would move forward after the lockdown is fully lifted. “I am really distressed because it is a herculean task to open up economic activities .... There has to be a very clear aligned narrative from the PM because, whether right or wrong, when he says something people seem to follow,” he said.
In terms of the government, some very, very long-pending issues [have been take up] such as the abrogation of Articles 370 and 35A of Kashmir. The court in the same period solved the Ram Mandir issue. [Other milestones are] the triple talaq law and the Citizenship (Amendment) Bill.
We gave a lot of thrust to agriculture. PM Kisan was expanded to cover all farmers. Another ~1 lakh crore for farm gate infrastructure was announced.
We started the process of transformational policy change -- like coal mining, which was finalised in the Atmanirbhar Bharat package and also approved by the Cabinet... In this whole period, the focus has been on a number of initiatives that would strengthen India in the long term, and present opportunities for people in agriculture, food processing, fishing, mining... [Efforts have been to] try and shrink the gap between rural and urban India.
The year 2019-20 saw the highest capex (~1.61 lakh crore) in the history of Indian Railways. PM Modi has consistently believed that railways can be the engine of growth. Therefore, 2019-20 got 20% additional funds compared to 2018-19... we have spent [between 2014 and 2019] nearly two-and-a-half times more than
We have not done the math as yet and we will have to see how long this impact continues...the bookings are not too many. So,
The major countries — the US, the UK, the EU — we were talking to are under severe stress. In fact, there is a lockdown in most of these places.