1.Economic activities must be restored in India: China’s model shows us the way

  • How did China tackled this monumental crisis?

  • How did the online sales kept Chinese economy going?

  • What can the government do to restart India’s ailing economy?

UPSC Can list these Questions under

GS paper 3 ( Indian Economy)

What is the context about?

  • As the coronavirus disease (Covid-19) spread across the world, India decided to opt for a complete nationwide lockdown.
  • It indeed helped control the infection, but has, predictably, invited great economic cost too.
  • The crisis in China was equally monumental. Can it teach us how to tackle the crisis?

How did China tackled this monumental crisis?

  • China opted for a collaborative, data-based approach, with tech companies such as Alibaba, Tencent, Baidu, Huawei, and Meituan helping the government take timely action to prevent the spread of the virus and, at the same time, keep the economy running.
  • But the equally important fact is that China didn’t opt for a nationwide lockdown as stringent as India did.
  •  It did completely lock Wuhan, the worst-affected city in the country, but it let the less-affected regions partially open.
  • It allowed the availability of e-commerce for all items throughout.

How did the online sales kept Chinese economy going?

  • Hyper-local delivery services leveraged their online platforms to link consumers with offline services and on-demand delivery. By the end of February, 50,000 offline shops had migrated online, partly because the platforms reduced or waived-off fees.
  • The Chinese government-endorsed digital migration and digital sales channels, which gave confidence to consumers and small and medium-sized enterprises to move online.
  • The surge in online sales allowed many companies to create temporary employment schemes, absorbing self-employed daily wage earners affected due to the lockdown.

What can the government do to restart India’s ailing economy?

  • India is yet to touch its economic disruption  peak. To minimise the economic disruption, it must find ways to strategically open up the economy in a way that doesn’t add up to infections.
  • E-commerce, which the safest way to keep the economy running while ensuring social distancing, must be opened fully, in red, orange, and green zones.
  • As of now, India allows only essential items over e-commerce platforms. But defining the essentiality of a commodity is a difficult exercise. The interconnectedness of the economy allows the sale of non-essential items produced by an economically weak person, with the profit nudging him to buy essentials, and thus, helping him contribute taxes.