The rubric for a new order cannot be built on the ashes of the old

India is a country of the poor, the marginal, the micro-entrepreneur, small and medium business owner. It is on the back of these that the formal economy and even the government and its various arms sit.

There is a sense of disconnect when policymakers announce fiscal policy interventions and stimuli. These work in a fashion, based on how well targeted the policies are, that too when the economy is functional, albeit under stress.

What we are seeing is a never before grinding halt of the nation and the world, that has come about with a suddenness whose after-effects are unfolding a turn of a page at a time. This cannot be cured by models of the old. But the policymakers are bent on pulling out old tired solutions that didn’t work even in the peak of the socialist era.

The labour commissioner offices threaten legal action on small 10 employee businesses if salaries are not paid. And pray! Where does the money come from when every end of month the small business has been scrambling to collect enough to meet salary and interest obligations from their customers. Moving forward, at best, a 90 day zero business and then another 180 days to a new normalcy means 30-40% of the informal and small business will be wiped out. But Commissars have deigned, if there is no bread, then just serve up some cake. Well ensconced on taxpayer money that ensures their monthly take home is assured, they are running their own fiefdoms under the guise of being the protectors of the proletariat. This bourgeois under a pretense/pretender of social fabric protection is what breaks camel’s back.

In this the really stressed times it is the responsibility of the policymakers that the Transmission of messaging is done with a great deal of thought. Else the execution is likely to bring about the imagery of Emergency times where the ground force was more loyal than the king in enforcing brutality.

There is a tsunami that is in the offing and certainly, hindsight is likely to be 2020. (pun intended). The cost of a set of interventions here and now will look like pocket change if the only thing we are planning right now is a forward-looking fiscal and monetary intervention whose transmission lag will sink the Titanic.

The situation requires a boldness that brinks on the foolishness of Tuglakian misadventures.

My suggestions are born of a conviction that the mandarins have a zero clue ( and rightfully so) given that this a playing field never seen before . We need to behave like the country has gone on a Rip Van Winkle hiatus for 90 days. This tempered with the fact that food and health protection are the only value chain systems that should chug along to keep the body together.

Everything else should be reset to a 90 day later clock. That is the only way we can ensure that the pain is minimal. All other stimuli are required but is a post 90 day clock start.

How does this translate into real actionable points . Will make a beginning with a 7 point action list that Central Government should take.

1. Start by putting on hold all statutory and fixed cost for 90 days. This will hurt the Respective stakeholders in the short run but will be more than compensated for by the lower costs of reigniting the economic engine
2. Since salaries cannot be stopped, enforce a mandated 10% salary cut for the next 18 months with no exceptions across the economy ( which means even the government and its arms ). In any case, most of the population’s discretionary spending is on a freeze. So, in reality, the individual will not see the reduction burden eating into their normal costs of living. (The marginal have to be addressed differently. That is to be dealt with as a separate but equally important discussion) . What this does is allow the economy a big breather while it comes to its feet while not hurting many who would have faced joblessness due to an across the board failures of the semi-formal and formal economy.
3. Stop all statutory payments including interest costs. This means banks, formal and informal lending institutions will not earn interest for 90 days. In turn, they will not pay interest costs and other fixed costs. The immediate push back is what about segments of people like senior citizens. The government needs to compensate those classes of citizens for whom survival is based on interest earnings. This would be a Tughlakian solution but the quickest transmission of a stimulus that the government can do. Does the government have the chops to make so bold? We will see. For this plan is so easy to shoot down as being devoid of merit without even application of mind.
4. Get every state to put together an Ease of doing a Business plan that targets an inflow of at least 20 billion USD in the next 24 months and create a PPP marketing team to pitch the plans around the world
5. Whet, supervise, and Act with seriousness when there is a push for rent seeking in the execution. The country has shown that it can come together in survival threatening times. We just need to ensure that we don’t fall back to the old bad habits. Those inertial systems are already pushing back with vigor. Lack of vigilance brings it back with double the force.
6. There are segments of the economy that need to be handled with a different set of metrics but that is something the state governments are equipped to do, so don’t want it to take away from the thrust of the action points.
7. Should you be bold enough to do the above, do not cherry pick. Expand on it don’t dilute it.

If ever there was a leader that carries a belief and is willing to Act on it is our PM. I do hope he and his team are really thinking way out of the box, for working on the margins won’t cut it anymore. This is an armchair individual weighing in and willing to look foolish just so we do think out of the box! Don’t be dismissive. Come up with an even bolder low-cost action plan . Challenge me, there enough thought that has gone into this to make it a well-fought duel.

Carpe Diem !!