The coronavirus pandemic has dealt a serious blow to all economies, but the growth contraction in India is particularly painful. For the first quarter, growth contraction was a massive 24 percent. Historically India reforms best when our back is against the wall.
The pandemic has also thrown a lot of opportunities. It has quickened the pace of digitisation – schools and colleges have gone online, even government services which are the last to pick-up anything modern are all online now. The government has also come with some creative packages – one, it has tried to get into global supply chains by announcing PLI schemes and has ensured reforms in the labour sector and in agri trade so that agriculture becomes robust again.
The financial sector was always on the forefront of technology and digitisation. India’s UPI is the envy of the world and the financial sector is geared to the no face-to-face or a contactless world with ease. However, the financial sector has its own problems and Reserve Bank of India has come to its aid with rapid cutting of interest rates and restructuring packages, which are perhaps going to make it much easier for the financial sector to meet the challenges thrown by the pandemic.
To get a better picture, Latha Venkatesh spoke to KV Kamath, former chairman of ICICI Bank.
Watch the video for more.