As the Covid-19 continues to shatter the normal existence, our economy and ways of livelihood of many people have been disturbed to a great extent. The global economy has fallen into an unprecedented recession. The International Labor Organization has estimates that 400 million people in India are at risk of falling deep into poverty. Along with economic problems, there have also been an decline in the environmental condition that has further put the poor people into depression.
The government must take some comprehensive steps that are sustainable and will help to recover from the decline while becoming resilient. Here are some of the steps recommended by some eperts-
- Invest in sustainable energies- Infrastructure investments are an effective way to boost economic activity and create jobs. Data from the 2008-09 financial crisis shows that South Korea, which directed nearly 70%of its stimulus towards green measures, rebounded faster than other economies in the Organization for Economic Co-operation and Development (OECD). In the United States’ 2009 Great Recession recovery package, investments in clean energy.
India too should take this opportunity to increase support for renewable energy, particularly rooftop solar, through appropriate policies and business models. Decentralized solar power can help spread critical services in remote regions if the upfront capital constraints can be addressed. It should revisit the potential import duties on solar panels, since this may not increase domestic production, but may raise the cost of solar power.
Similarly, scaling up the electrification and adoption of public transport will be critically important to reduce traffic congestion and air pollution. This should involve closer coordination with the electricity sector and a greater focus on vehicle charging infrastructure. Continued investment in cold storage facilities and supply chains will ensure the preservation and timely delivery of agricultural produce and reduce losses to farmers.
2. Build resilience for the most vulnerable- About 90% of India’s workforce is informally employed, which includes gig economy workers. This population is extremely vulnerable to economic shocks and needs greater access to formal credit and social safety nets such as insurance and pension schemes.
Beyond employment guarantees, a universal basic income – broader than current schemes that are conditional upon occupation and land ownership – can help provide vital resources for subsistence, or for investing in education and health. Greater access to bank accounts for the 20% of adults without one, per 2017 data, would help efficiently deliver this income to households.
Lastly, it is critically important to expand access to clean water, clean air and primary health care. These will improve life expectancy and increase economic and physical resilience.
3. Use fiscal mechanisms for recovery and resilience
Fiscal mechanisms can help support recovery and resilience efforts, while promoting low-carbon development. The Indian government has announced an economic stimulus of INR 1.7 trillion ($24 billion), and is exploring another bailout of INR 750 billion for Micro, Small and Medium Enterprises (MSME), among other steps. Though MSMEs need immediate financing to deal with their wage bills, the government can also infuse capital for them to undertake needed industrial energy efficiency upgrades.
Several sectors, like the aviation and auto industries, will need support in order to recover. This will require consideration of the fiscal situation, and it presents an opportunity to encourage greater sustainability by making this support conditional on cleaner technologies and fuel efficiency.
4. Encourage long-term change in behavior
The current crisis has changed patterns of consumption. Electricity usage patterns have shifted as people are working from home on more flexible schedules. Non-essential purchases have temporarily ceased. All these offer an opportunity for implementing demand-side solutions to drive long-term behavior changes for more sustainable development.
For instance, encouraging conservation in energy – through nudges and tariff reforms – can drive down consumption. Promoting reuse, recycling and repair models for consumption can contribute to a circular economy and reduce the waste generated by current business models. Supporting the continuation of work-from-home policies can drive down road traffic congestion and air pollution.
5. Regulate enabling technologies
Finally, it is useful to consider that the future may see greater employment in the gig economy and e-commerce sectors, as well as in new technologies that can help support future response and resilience mechanisms. While supporting the development of such sectors, it is important to put the right regulations in place to ensure data privacy and consumer protection.
The decisions taken today can provide immediate relief, but also secure a lasting economic recovery, increase community resilience and ensure a long-term pathway to sustainable development. We shouldn’t let this chance slip.