172@29@17@143!~!172@29@0@53!~!|news|business|economy|people-more-pessimistic-than-needed-india-will-have-v-shaped-recovery-says-cea-subramanian-5264651.html!~!news|moneycontrol|com!~!|controller|infinite_scroll_article.php!~!is_mobile=false
Moneycontrol
Subscribe to PRO at just Rs.33 per month. Use code SUPERPRO
Last Updated : May 14, 2020 11:34 AM IST | Source: Moneycontrol.com

People more pessimistic than needed, India will have V-shaped recovery, says CEA Subramanian

He was also optimistic about future announcements of the Rs 20 lakh crore package, suggesting that they would be “significantly reform-oriented.”

India’s Chief Economic Advisor (CEA) Krishnamurthy V Subramanian expects that the country will have a V-shaped recovery. People are “more pessimistic than they need to be,” he said.

Subramanian made the statement at a virtual conference by All India Management Association (AIMA) on May 13.

He pointed out that Spanish influenza had a higher kill rate, but the economic rebound was rapid after the situation came under control. Optimistic about India’s growth recovery, Subramanian said the stimulus package would address the supply-side impact with liquidity injection, News18 reported via IANS.

Close

“Businesses do not have the revenue while they are bearing the fixed costs and their variable costs have not declined much. The liquidity issue may create solvency problems for firms," he added.

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

Follow our LIVE Updates on the coronavirus pandemic here

Stating that Money could be targeted at sunrise rather than sunset sectors, he said, adding, "Creative destruction is required in market economies and the inefficient firms have to die and the workers have to be reallocated.”

He also likened the present stimulus package and government measures to the 1991 economic reforms, terming it “radical”, especially for labour (Gujarat, Uttar Pradesh and Madhya Pradesh), land (Karnataka), agriculture sector and liquidity.

He expects public sector banks (PSBs) to be more open to lending as they were reluctant before the pandemic and even during it, adding that banks were nationalised “to help in times like this.” He felt that the Centre’s 100 percent guarantee of MSME loans would encourage banks and even non-banking finance companies (NBFCs) to lend more.

“A measured dose of monetisation” would not spike inflation due to deflationary impact from COVID-19.

He was also optimistic about future announcements of the Rs 20 lakh crore package, suggesting that they would be “significantly reform-oriented.”

He also added that Atmanirbhar Bharat would mean tailoring products for those bottom of the pyramid and not just the top 30 percent of the population. The CEA also added that the Centre is trying to help the migrant workers by introducing a national ration card.

The CEA said the industry had to hire local workers even at higher costs and invest in the safety and skills of the migrant workers. He said the government was trying to help the migrant workers by introducing a national ration card.

Follow our full COVID-19 coverage here
First Published on May 14, 2020 11:34 am
Sections