Fundamental aspects put in place to ensure minimal impact of

COVID-19 on economy, says CEA
Chennai, Apr 20 (PTI) The impact of COVID-19 on the
economy would not be 'very large' as the country has worked
very well on converting the crisis created by the pandemic
into an opportunity, Chief Economic Adviser K V Subramanian
said on Tuesday.
Participating in the 'Distinguished Thought Leaders'
lecture series, organised by the Great Lakes Institute of
Management, (GLIM), he said that the foundation (to revive the
economy) has been laid a lot.
"I am confident that the impact on the economy due
to COVID will not be very large".
"India has really worked on converting this (COVID-19
impact on economy) crisis into an opportunity and I think
there is a lot of good fundamental aspects that have been put
in place to enable the impact of the pandemic was minimal," he
said.
However, the CEA said the only cause of worry was that
there should not be any loss of "production capacity" to
smaller firms.
"I think the only worry I have is there should not be any
loss of production capacity and that is why we have focused a
lot on small firms (by offering like) emergency credit", he
said.
In the past year, during the pandemic, large firms have
done 'pretty well' in managing the crisis, but 'smaller firms'
were 'more impacted'.
That is the reason the government focused more on
reducing the damage caused to smaller firms like issuing
emergency credit, he said.
"For instance we have changed the Bankruptcy Code--
ensuring that the production capacity was impacted the least
on smaller firms", he said.
However, Subramanian cautioned that the situation must be
reassessed once the second wave of the outbreak is over.
"We are still amid the second wave of the pandemic and
it is good to assess once the second wave is over. What I had
said earlier is based on the impact caused by the first wave.
We have to reassess after the second wave, but still I
think that the impact will not be very large in the long run",
he said.
Subramanian said India as a large economy has implemented
a 'slew of reforms' and has used the crisis to actually
"herald a change in economic thinking".
"Atmanirbhar's idea is focused on enabling the private
sector. That is why it is different from the pre-1991
experience of actually trying to build a self sufficient India
and not a self-reliant India," he said.
India's emphasis on capital expenditure driven growth
would lead to a far more "sustainable" growth, ensuring that
the fiscal and monetary policies remain in sync, rather than
contrasting with each other," he said.
To a query on privatisation of public sector enterprises,
the CEA cited an example and said privatising Bharat Petroleum
Corporation Ltd led to an increase of Rs 55,000 crore value to
the oil marketing company, benefiting the taxpayer and the
government.
"The announcement of privatisation --- the anticipation
of better management -- has actually increased the value of
BPCL as compared to HPCL (Hindustan Petroleum Corporation) by
Rs 55,000 crore benefiting the taxpayer and the government.
It is an effective addition to the national wealth rather
than keeping them under valued", he said. PTI VIJ SA APR
ADMINISTRATOR
APR
ADMINISTRATOR

(This story has not been edited by THE WEEK and is auto-generated from PTI)