As global outlooks have tended towards pessimism in light of the coronavirus crisis, tepid stock markets have been only a minor feature of the broader anguish, which investors and governments face. In order to guide the economy back to a sustainable mode of functioning, calculated policy enactments will be looked on to, as the bellwether of overall economic health.

Share Market Live

NSE

With oil markets and several other sectors plunging over the last few weeks, the focus will be firmly on policy actions which are likely to alleviate public distress, address collective anxiety and renew confidence in the economy in the medium and long-term. The upcoming quarters will necessitate the passing of a number of new policies in addition to improving existing ones.

Here are the top five policy moves which are likely to be debated as an offshoot of the coronavirus pandemic:

1. Historical contexts in vaccine production- As of the present moment, the vaccine industry has received considerably more attention than at any point before, as humanity looks upon it to fast track the antidote to the virus. The common concern will be the time frame. Is a year or two going to be too late for the production of a viable solution to COVID-19? As there are several stages in the discovery of a potential cure, the search for a vaccine is still at a preliminary level; information gathering and testing. Regardless of the time frame, it is certain that the coronavirus crisis will make vaccine producers rethink the various parameters such as reach and time frame in the production process.

2. Comprehensive bailout packages- The slide in global GDP and the pause on economic activity has had detrimental impacts. In the wake of the 2008 crisis and the fall of the Lehman corporation, the governments in Europe and the United States ensured that sectors deemed “too big to fail” were bailed out in various phases. The current situation although vastly different in its contours, still calls for stimulus packages on a quarter-to-quarter basis but also while ensuring inflationary pressures and interest rates do not spiral to unprecedented levels. The Indian government has recently passed the Finance Bill 2020 which creates reductions in Income Tax and provides benefits to corporates which operate in the manufacturing and energy sector. While this is a welcome move, it remains to be seen if India will enact more policies which compensate economic losses arising from COVID-19. The critical infrastructure of India will reflect the outcomes of carefully considered policy decisions.

3. Green New Deal- There has been a rapid amount of anecdotal evidence suggesting that the lockdown has been beneficial to biodiversity and that nature has been recuperating. The fall in toxic emissions and pollution is a welcome sign but as economic activity is gradually restored, the debate around climate change and the government’s commitment as per the Paris Accord and international conventions will have to be prioritised and renewed. Across Europe and USA, the impetus for what is known as the “Green New Deal” has gained momentum over the last year. The European Union has recently enacted a ten-year investment plan to ensure the transition from a high to low carbon economy bloc; reducing emissions by 55% by 2030.

4. Universal Basic Income- Varying versions of a UBI, such as the recently passed CARE Act in the United States and the “special schemes” by the State Governments of Karnataka and Assam which aim to provide a basic income to migrant workers will serve as a precedent for future recession like situations and slowdowns. It could also be argued that this comes at a cost to the public exchequer, but the ground realities suggest that the unorganised sector workforce needs an economic safety net which only the government can provide.

5. Improved and increased digitisation- OTT platforms have witnessed a larger chunk of user traffic since the announcement of the lockdown. Sectors such as fin-tech, e-learning and logistical delivery services have also seen surges in numbers, although not as rapid as online news portals. The digital economy has been going from strength to strength in the last decade, but ensuring that more participants enter its fold will require a relook at the existing incentives such as collaboration in the form of public private partnerships and increased consultations in the planning process so as to prepare for similar emergency situations in the future.

First Published:Apr 21, 2020 4:58 PM IST