The Chief Economist at HDFC Bank Abheek Barua says the Indian economy will not see a V or U shaped one, but mostly have a ‘Nike Swoosh’ recovery, when the disruption from the pandemic corona virus and nationwide lockdown to stop gradually.
Addressing the ETMarket’s Investor Conference on Friday so Barua expressed hope that the economy would be back on a strong footing in year 2022. As he said that ” It is a V-shape recovery with one tail of the V stretched out. A lot of the tail is dependent on the trail of the virus and my bet is that by autumn, we will not have vaccines, but therapies, in place”.
According to his words , India’s response for the endemic has been bold, but the stimulus has been small. He felt more could be done from the monetary side. Also Abheek Barua said “One is the response to the infection itself – which is bold. We would have been far worse had we not been locked down”.
After the announcement of lockdown on the 24th of March, India first shut down its international flights which then was extended twice. first up to May 3 and now till May 17. He stressed and gave words that he have been disappointed and a bit fidgety about them not announcing anything especially since other countries have gone the whole hog. He just hope this is the time to slowly show the world what you have in your armour. They have had the most stringent lockdown and the smallest stimulus package. They are reasonably sure that They don’t have the money to do the large-scale benefit transfers to everyone in the population. He pointed out benefit transfers were not possible in terms of India’s fiscal constraints that it is an emerging market.
There has been rising risk dislike against China since the corona virus situation with some companies trying to shift production out of the country. Economists and analysts are looking at India as a potential beneficiary of this shift. As he emphasized that potentially they can grab a significant part of business in different sectors. There is hope there. It depends on how quickly they can push through some of the much-needed reforms. They need to respond to the industries’ needs and make India 75-80 per cent as efficient as China.