What we need is a map - an economic blueprint - that will address the need for domestic growth and put in place measures that will make India attractive for foreign investment.

The saying, extraordinary times call for extraordinary measures, holds more truth now than ever before. India has embarked on a journey of self-reliance with the Aatma Nirbhar Bharat Abhiyan – an economic stimulus of extraordinary proportions to provide financial relief in the wake of the Covid-19 pandemic, so as to enable business survival and continuity and  improve the environment for agriculture, and transform India into a hub for global manufacturing and services value chain. The journey has begun; what we need is a map – an economic blueprint – that will ensure we reach our destination. This blueprint would need to address domestic growth and put in place measures that will make India attractive for foreign investments. 

Health is Wealth

Providing a shot in the arm for private domestic investment, the finance minister has deciphered the math behind the stimulus package to ensure that agriculture, business and manufacturing are back on track as we deal with the virus. The lion’s share has been carved out to help MSMEs survive and thrive, bringing about a positive impact on the overall industry sentiment. But if there is anything that the pandemic has taught us, it is the need to have better healthcare systems and our economic revival will depend a lot on how we strengthen our health infrastructure.

The stimulus package has zeroed in on the need to improve our public health systems. Towards this, the Centre has committed Rs 15,000 crore for health-related measures so far. While healthcare infrastructure and service strengthening will be top priority for the government; the other measures announced include infectious diseases hospital blocks for all districts, and the strengthening of the lab network and surveillance apart from encouraging research. The objectives behind these announcements are clear: build capacity and prepare India for any future pandemic; boost digital health adoption in India; and bridge the current gaps in the health system.

Given its significance in the current environment, the healthcare sector must be made a key part of the national agenda by ensuring that all policies hereafter must place the most vulnerable at its center. At the core of a blueprint must rest the belief that development will be guided by a philosophy that benefits the most vulnerable. Citizens need better access and availability of health infrastructure – if anything the pandemic has underscored the need to address fundamental issues like shortage of doctors and health care professionals, ensure access to facilities for all and build affordability. To allow access to healthcare to the masses, we need a ‘national fund for healthcare’ that will not only reduce the cost of capital and but also bring down the viability gap. Public investment would also be required to set up a data-driven community healthcare surveillance system that can be used for predictive analytics and preventive interventions.

Incentivizing  the setting up of healthcare facilities by leveraging public-private-partnerships (PPP) would be key to building scale across five key healthcare services like hospitals, primary care, diagnostics, medical colleges, and digital clinics or telemedicine. A ‘National Health Infrastructure Development Fund’ could be one way to help boost the private health sector especially in Tier-II & III cities.

Attract Foreign Investments

Apart from spurring the domestic economy, the blueprint should also look at investments coming in from abroad.
Given the uncertainty with global capital flows, there has been a drying up of foreign direct investment (FDI). So, any inflow is a good step to revive India’s post-Covid economy. The government’s efforts should thus look at charting a course that will focus on making India an attractive destination for investments.
Investors would look for destinations that have strong governments, huge entrepreneurial talent, a developed domestic market with a thriving private sector apart from being a source of low cost skilled labour. India has what it takes; we just need to package it smartly.
We must also identify and focus on key sectors such as IT/ITeS, medical tourism and pharmaceuticals that offer greater competitive advantage, and industries where India offers a large domestic market. Identifying strategic sectors based on market advantage, or the potential to generate employment, or one that adds multiplier value creation on other sectors will help in creating a priority framework.  Additionally, we should look at strengthening our manufacturing ecosystem because investors interested in moving their money to India would look for an environment backed by regional industrial frameworks and policies, both at the national and state levels
Redesigning institutions for export promotion by creating new capabilities for increased focus on trade promotion and investment would also provide a thrust to exports. Another measure would be to simplify the existing labour laws, facilitating access to intellectual property (IP) protection tools, setting up free zones with tax holidays or SEZs, and cutting friction in logistics which could go a long way in attracting global companies to India.
If India’s blueprint for economic growth complements its capabilities with more open trade and investment policies, it could not only be a major beneficiary of global investments but it would also provide impetus to ‘Make in India’ and make India truly Atmanirbhar, a win-win situation in a post Covid-19 world.

A version of this article appeared in The Business Standard on 7th June 2020.