An injection for reform and growth
the world. The measures announced for the agricultural and allied sectors are particularly transformative. The new proposed law that allows inter-state trading of agricultural yield will allow farmers to leverage attractive prices and markets beyond their home state, stepping towards the One Nation One Market objective. Similarly, the proposed amendment to the Essential Commodities Act will allow private players to purchase agricultural commodities on a large scale. Moreover, measures worth $13 billion to enhance farmgate infrastructure will go a long way in boosting farmer incomes and thus, achieving the goal of self-sustainable villages. However, these measures must be coupled with a robust digital trading platform. The government may come up with a national grid of local platforms currently operating in isolation, along with bringing credible agri-tech startups onboard. This shall also help in standardisation of quality parameters of the agricultural produce and in providing digital tools to assess quality.
Like agriculture, MSMES are collectively one of the biggest employers — with about 120 million workers on their rolls, including migrant labourers. Around 75 million MSMES contribute to about a third of the GDP and 45% of the manufacturing output of the country. But, at the same time, they are considered by banks to be the riskiest borrowers. According to a Bizfund report, only 16% of MSMES in
India get formal credit, leaving more than 80% of these companies under-financed or financed through informal sources. Therefore, a large part of the stimulus is really about activating channels of credit. The ₹300,000 crore collateral-free loan facility for MSMES or the ₹30,000 crore liquidity facility for NBFCS, mortgage lenders and microfinance institutions announced in the first tranche of the package are examples.
Another sector that will assume importance will be health care. Almost every country has been compelled to relook how much it spends on public health. For perspective, it is important to note that the total per capita government spending on health care has nearly doubled from ₹1,008 per person in FY15 to ₹1,944 in FY20. The government has decided to increase public health spending, besides other prudent measures such as establishing government diagnostic labs till the block level. While currently, this will strengthen the country’s testing capacity, for the future, it will help foster a more resilient grassrootslevel health infrastructure.
The recent announcements are also a testament to our government’s balanced approach in addressing concerns across sectors. For example, the newly launched PM e-vidya programme for multi-mode access to digital online education provides a uniform learning platform for the whole nation, which shall enable schools and universities to stream courses online without further loss of teaching hours. Additionally, limiting imports of weapons and increasing the limit of foreign direct investment in defence from 49% to 74% will give a much-needed boost to the Ordnance Factory Board, while reducing India’s huge defence import bill.
To establish clout overseas, we must first become a formidable unrelenting force at home. The magnitude of the problem has been huge. It’s of a size that no government in the world could have been prepared to face. However, as the curve flattens, the Centre’s revival plan is optimal and logically sound. It provides a safety net for the most vulnerable, and a “vitamin injection” to re-unleash the animal spirits of growth-critical sectors. We seem to be well on course in this pursuit.