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The world has been facing a reset wherein COVID-19 has made people resilient and created a transformative world. There have been disruptions across verticals.
It is believed that the pandemic will continue to be disruptive, giving rise to massive and multidimensional disruptions in the New Normal.
In its endeavour to contain the impact of COVID-19, the government opted for the ‘Barbell’ strategy through the imposition of the severe lockdown to cushion the vulnerable section of the society and to hedge out the very worst outcome.
The government in its attempt to cushion the MSMEs has created SPV for NBFCs to help the smaller businesses and MSMEs allowing for infusion liquidity into their businesses.
The state plays the role of enabler, provider of public goods. In the times of crisis, such as the one the world is facing currently, it plays the role of a safety net. This facilitates risk taking and smooth passage in a challenging environment as the state remains there to guarantee contracts and act as a safety net, which helps both in cushioning and rebuilding for businesses and individuals.
There are various reforms which have been brought about by the Government such as labour market flexibility, measures have been taken to open up the mining sector keeping in mind the environmental and energy security concerns.
In the Agriculture sector, the Essential Commodities Act has been eased to help the farmers easily sell their products as well as the traders to store or invest in storage.
The Government is keen on privatisation of a few sectors to help improve the market conditions. Public-private partnership in sectors such as space and atomic research are being considered.
The move towards decentralisation is being pondered upon which would allow individuals to take decisions at their level, and allow states to compete for businesses.
In the case of Vocal for Local or ‘Atmanirbhar Bharat’, the idea is not about moving away from investing in the global supply chains or stopping the FDI but is about protecting certain industries, creating onshore capacities and domestic capacities in manufacturing in certain sectors like defence.
The post-COVID-19 world is expected to be different. There will be radical changes which cannot be predicted. The new world order will witness a new wave of geopolitics, technological advancement, different patterns of consumer behaviour and supply chains.
There will be innovative disruptions in the New Normal which would lead to competition in terms of productivity of labour. However, not too many products will be disrupting the markets and traditional marketplace products will still dominate.
For India, focusing on new markets and creating value chains, would be crucial. One would have to invest in flexibility, resilience and domestic capacity in the New Normal.
The industries will have to bring in the efficiencies and build upon core capabilities in the New Normal. For example- there will be a transformation in the automobile industry in terms of electric mobility.
In traditional sectors like textiles, the need to move away from cotton fibre fabric to man-made fibre fabric would be crucial. It would also call for structural transformations in the economic landscape.
There is a need to provide better markets and rebuild brands in sectors like hospitality and tourism, which have been worst hit by the pandemic.
One will have to learn from the experiences of this pandemic and develop innovative ideas, focus on nimble decision making and integration. Rediscovery and reinvention in various sectors is the need of the hour especially in shaping up of public policy.