Economic Recovery Measures . Government has to do ‘leap of faith’ now, says Pronab Sen

The Government is on a wait-and-watch mode as far as the economy is concerned and this is a bad strategy in current situation, Pronab Sen, former Chief Statistician of India, said.

“If you are going to wait for things to develop before taking steps to boost economic recovery post lockdown, the degree of damage to economic system could be so large that it may be irreversible. Speed with which decisions are taken may not be entirely right, but speed is of essence. Otherwise you will be causing more damage to economic system than what the crisis presents,” Sen said delivering the 2nd TN Srinivasan Memorial Lecture at the NCAER-organised ‘India Policy Forum 2020’.

Sen, in his lecture on ‘Data in Coronavirus times’ delivered through digital medium on Monday evening, said that what the government has done till date is to create enabling conditions to help businesses survive upto a point. Small businesses may survive, say upto three months, after which they risk the prospect of failure.

Uncertain times

“As far as direct public purchase of goods and services like infra spend, even if you take the decision to spend today, the first paisa is unlikely to hit the ground in 4-5 months which is why the urgency now. At least, start the processes now and if you are going to wait to see how the economy progresses before starting the processes, then you would have missed the bus. A certain leap of faith should happen now and you have to have models that you can rely upon. There will be approximations, but those corrections can be done later stage before damage becomes too large,” Sen said.

Sen highlighted that companies are now faced with high degree of uncertainty and at the moment there is no data or information available that would give them some sense of the progress of the uncertainty — is it going up or going down. “When you had national lockdown, there was no uncertainty. That was it and end of the story. But now lockdown is lifted but disease progression continuing, uncertainty itself is becoming larger,” he said.

Sen also underscored the importance of using administrative data to measure change, but not change the national accounts. “Please check for consistency and stability of administrative data. If they do satisfy, then use them for measuring change,” he said.

Recovery picture

Pronab Sen said that India’s GST data would help policymakers to try and assess the extent to which economic recovery has started in different parts of the country. Although they are valuable, this data set is not being used in a manner it should be, he said.

“If there is one data set that can help me get the right picture of recovery in economy, it is GST data. GST data itself is giving you all the granularity you want. Granular in terms of products and activities and granular in terms of geographies. Unfortunately, this data is not in public domain and it is unlikely to be so in future as well,” Sen said.

He called for building of public pressure to get the government to disclose the GST data, while maintaining confidentiality.

Meanwhile, on the battle against Covid-19, Amitabh Kant, CEO, NITI Aayog, suggested that India should rank States not on the total number of cases, but only on the number of testing done. “Even now on the total number of cases and deaths, India has done reasonably well. But we should rank States only on testing,” he added.

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