January 20, 2021

Sambaad Patra

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2021: A CHALLENGING PERIOD FOR INDIAN POLITICS AND ECONOMY – The Leaflet

5 min read

The biggest challenge for the Modi government will be dealing with the Covid-19. It will not be easy to make sure that the 1.3 billion people in the country would get the vaccine in time. Presuming they will, India lacks the cold chain to keep the vaccine and this has to be bridged, says KALYANI SHANKAR.

WHAT does the crystal ball say about 2021?

The famous French astrologer, physician and prophet Nostradamus predicts that it will be the year of catastrophe, as the pandemic will continue though many optimists expect it to be better than 2020.

When it hit the world, it was most unexpected and many countries were unprepared for facing such a pandemic.

The biggest challenge for the Modi government will be dealing with the Covid-19. It will not be easy to make sure that the 1.3 billion people in the country would get the vaccine in time.

People are now mentally ready to face the onslaught of the Covid-19.

Fortunately, some countries including India have come up with the vaccine.

Nostradamus predicts that the world economy will collapse and “the rich will die many times”. Importantly, the work from home culture may continue.

Many economists predict that 2021 will be a bad year not only for India but also to the entire world. The Economist Intelligence Unit predicts that economic conditions are likely to be weak in India in 2021 owing to strains faced by the banking sector, leading the economy to register a double-dip recession.

2021 will be a year of challenges.

The biggest challenge for the Modi government will be dealing with the Covid-19. It will not be easy to make sure that the 1.3 billion people in the country would get the vaccine in time. Presuming they will, India lacks the cold chain to keep the vaccine and this has to be bridged. The Covid warriors have so far done an excellent job despite many constraints.

The second challenge is to find more money to deal with the pandemic in the 2021 budget, as there is an urgent need to improve health facilities, particularly in rural areas.

The third challenge is the sliding economy.

Many economists predict that 2021 will be a bad year not only for India but also to the entire world. The Economist Intelligence Unit predicts that economic conditions are likely to be weak in India in 2021 owing to strains faced by the banking sector, leading the economy to register a double-dip recession.

The Reserve Bank of India (RBI) had also projected that the GDP would contract by 9.5 percent in the current financial year amid disruptions caused by the coronavirus pandemic and it may turn positive in the last quarter (January to March).

Credit rating agency Moodys has predicted, “India’s credit profile increasingly constrained by low growth, high debt burden, and a weak financial system. However, Moody’s expects India’s economic growth to rebound to 10.6% in the next fiscal year (FY22) on a strong base effect.

Politically, India’s ruling BJP led NDA will be in a much stronger position in Parliament. It will provide the BJP furthering its political agenda with greater manoeuvrability and attempt more reforms. However, while such reforms will support medium-to-long-term growth, in the short term weak economic conditions and tensions might continue.

The fourth challenge is to find jobs for the millions who lost their livelihood due to the lockdown. Added to that is the migrant labour issue as many of those who walked back home after the lockdown are yet to come back.

The fifth challenge is to tackle the growing farmer’s unrest. Thousands of farmers from about 11 states have marched to Delhi and are protesting for many weeks now. Modi is facing his biggest challenge from the farmer’s lobby that wants repeal of the three farm laws passed by Parliament.

Politically, India’s ruling BJP led NDA will be in a much stronger position in Parliament. It will provide the BJP furthering its political agenda with greater manoeuvrability and attempt more reforms. However, while such reforms will support medium-to-long-term growth, in the short term weak economic conditions and tensions might continue.

The Indo – US relations will continue to be warm as the new Biden administration is expected to be friendly to India. Biden might ease the visa regulations as he had promised before the Presidential elections. He might also address trade-related issues.

The political challenge will be the Assembly polls scheduled in five states during the mid-year. The poll-bound states include Assam, West Bengal, Tamil Nadu, Kerala, and Puducherry.

Essentially it is the fight between the BJP and the regional satraps. Stakes are high for both the BJP and the regional satraps. The BJP wants to expand in the south and capture West Bengal and improve its position in Tamil Nadu and Kerala.

As for foreign policy, 2021 might see fresh renewed strains and trade challenges.

New Delhi will continue its diplomatic engagements with more vigour. Engagement with the big and small power will continue in 2021 despite Covid-19.

The Indo – US relations will continue to be warm as the new Biden administration is expected to be friendly to India. Biden might ease the visa regulations as he had promised before the Presidential elections. He might also address trade-related issues.

The diplomatic strength at the Permanent Mission of India to the United Nations (PMI) is being enhanced as India readies to sit in the UN Security Council as a non-permanent member this year.

India will launch year-long celebrations from August 2021 to commemorate 75 years of Independence with a slew of programs to showcase ‘development, governance, technology, reform, progress and policy’ over the years.

By and large, the year 2021 will be a mixed bag with some good and some bad news not only for India but also for the entire world. (IPA Service)

(Kalyani Shankar is an author and a senior journalist based in Delhi who has covered politics for decades. The views are personal.)

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