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Prime Minister Narendra Modi is likely to discuss crucial issues of bringing back the economy on track in his meeting with chief ministers (PTI)
Prime Minister Narendra Modi is likely to discuss crucial issues of bringing back the economy on track in his meeting with chief ministers (PTI)

PM Modi’s meeting with CMs: Five things to watch out for

  • the states and the Centre are expected to take up lives and livelihood issues together than lives over livelihood.
  • The meeting may discuss how India could look to leverage this crisis as an opportunity to attract investors away from China to promote manufacturing here

NEW DELHI: Prime Minister Narendra Modi, in his meeting with chief ministers on Monday, is likely to discuss crucial issues of bringing back the economy on track gradually as the 40-day-long nationwide lockdown nears its completion. The high level meeting is expected to discuss lives and livelihood issues and extension of the lockdown in red zones among other things. Five key things to watch out for ahead of the meeting:

Lives and Livelihood: Unlike previous meetings, this interaction is expected to focus on how the country can save lives from the pandemic and while doing so not let the economy slip out of hand completely. With nearly 28,000 cases, including 872 deaths, the country cannot sit in peace and the high level meeting is expected to take it up while discussing the possibility of an extension of lockdown at least in red zones, which account for two-third of the cases now, if not universally. While agriculture activities have started functioning to salvage a harvesting season, the entire eco-system must work smoothly to help the farm economy pick up. With some 10 million needy people in different temporary camps post the lockdown due to lack of work, and factories almost non-functional, the states and the Centre are expected to take up lives and livelihood issue together than lives over livelihood.

Reviving Economy: The covid-19 pandemic hit at a time when India’s economy was already slowing due to persistent financial sector weaknesses, and post the lockdown economic activity has come to a halt. Several rating agencies and multi-lateral organizations have lowered the growth forecast for India in a post covid world. The government finds itself staring at a precipice with the International Monetary Fund slashing its FY21 growth projection for India to just 1.9% from 5.8% projected in January. Barclays cut its growth forecast for the country to 0% for 2020. While the states and Centre will discuss ways to reboot the economy, the meeting may discuss how India could look to leverage this crisis as an opportunity to attract investors away from China to promote manufacturing here.

Financial support to states: Over the last one month, chorus has grown from chief ministers demanding a special financial package for tackling covid-19 pandemic. Last week, chief ministers of two Congress ruled states -- Captain Amarinder Singh of Punjab and Bhupesh Baghel of Chhattisgarh -- wrote to Prime Minister Modi seeking special financial assistance and revenue grant for FY 2020-21. States like Kerala and Tamil Nadu as well as Delhi have similarly demanded more financial help from the union government. In the Monday's meeting, more CMs are likely to demand finance from the Centre to tackle the crisis effectively. CMs may reiterate demand for GST waiver on healthcare purchases.

Wage stimulus: There is a growing demand from industries especially the MSME sector that it needs government support to survive and have been demanding that like Germany, it should subsidize the wages of its workers. India Inc is pitching that at least 50% of the workers’ wages should be taken care of by the government during the crisis period else they will be forced to let go a sizable portion of their workforce increasing unemployment t crisis further. A wage stimulus package is being discussed at the central level and is expected to be on the table when CMs meet the PM meet today. While discussing support to industries, the meeting may take up the need to maintain social distancing and safety precautions to curb the spread of the coronavirus.

Testing facilities: States have sought more resources to deal with the health and the social impact of the coronavirus pandemic. States are now procuring covid-19 test kits as they seek to test more people to curb the spread of the virus. During a meeting with Union health minister Harsh Vardhan on Friday, state health ministers demanded more personal protective equipment, ventilators and testing kits from the Centre. The states may also take up the issue of the reliability of the much-hyped anti-body test kits from China following complaints of faulty results, and what ICMR has decided on its future mass deployment.

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