Published 18:28 IST, April 23rd 2020
Why India and Narendra Modi will be the leaders of the new world order
The world’s faith in the leadership of PM Modi and Indians, in general, has become even stronger with the exceptional handling of the Coronavirus crisis.
The world started a new decade in 2020 A.D. little realising that A.D. will be flipped to B.C. We now look back at life in 2020 as BC (Before Coronavirus) and After Coronavirus. Coronavirus will transform the personal and professional life of every individual. Coronavirus has impacted the economy of each & every Country. Global economic order has been substantially altered. This is bound to give rise to a new world order post-Coronavirus crisis.
However, in every crisis also lies an opportunity for the country to take a giant leap forward, and as Prime Minister Narendra Modi aptly stated, this is the time for all of us to rise and seize that opportunity. Even in this global crisis, Prime Minister Narendra Modi has shown inspiring leadership and visionary statesmanship. Citizens and Institutions have responded to the clarion call of PM to unite in the fight against Corona. Thus India is among the nations with the lowest percentage of infected persons and the lowest mortality rate if one considers the entire population. Coronavirus is the biggest challenge to humanity and this crisis should bring out best in all of us. We are fortunate that in Narendra Modi we have a PM who is leading by example and inspiring all sections of the society to give their best to overcome this crisis.
PM Modi's strong track record
The true character of individuals and nations is reflected in such emergent times. Even in these critical times, India has sent life-saving medicines and medical supplies to more than 60 countries across the world. President Trump, UN Secretary-General, and several top global leaders have applauded India’s efforts to help humanity. India has earned the admiration and respect of the entire world which also echos India's growing position in the new world order.
Prime Minister Narendra Modi has a strong track record of transforming a crisis into an opportunity for the nation and time and again he has proven his crisis management skills. The devastating earthquake in Bhuj in 2001 killed more than 20,000 people and lakhs were injured. About half-a-million structures were turned into dust. The economy was devastated and so was the morale of the people. However, as then Gujarat Chief Minister, Modi transformed Bhuj and Gujarat from being an epicenter of the earthquake to an epicenter of development.
Anticipating the opportunity to transform the country, PM Modi has already asked the New India to find innovative solutions to take the lead in the post-COVID world. He has also given a roadmap for the new normal and coined new vowels in the post-COVID world to be Adaptability, Efficiency, Inclusivity, Opportunity & Universalism.
The Centre's economic measures
In a bid to relieve pressure on an economy, the Central Government and the central bank have injected funds amounting to around 8 lakh crore which is about 4% of GDP to tackle the liquidity situation. The Central Government and RBI will take further measures to maintain adequate liquidity in the system and to facilitate and incentivize bank credit flows, ease financial stress, and enable the normal functioning of markets. The RBI also reduced the reverse repo rate by 25 basis points and TLTRO of Rs 50,000 crore to ensure that small and mid-sized corporates, including non-banking financial companies and microfinance institutions, get enough liquidity.
During this period of national lockdown, about 33 crore beneficiaries have received money in their bank accounts totaling to 30,000 crore by the direct benefit transfer scheme. Rs.15000 crore has been given to 8 crore farmer families under the PM Kisan scheme during the lockdown. Rs.10,000 crore has been disbursed to 20 crore women Jan Dhan account holders. 1 crore free cylinders have been given under the Ujjwala Yojana. 6 crore poor have already received free ration under the Garib Kalyan Ann Yojana. This aptly reflects the astute handling of this crisis and the overall economy in the leadership of Prime Minister Narendra Modi.
India will remain the fastest-growing economy in the world
According to IMF’s latest global projections, the post-Coronavirus crisis world economy is expected to plunge into the worst recession since the great depression. The global GDP will reduce by 3% negative growth. The USA will have (-5.9%) negative growth and Europe (-7.5%) negative growth. The total estimated loss to global GDP over 2020 and 2021 is over $9 Trillion which is much greater than the economies of Japan and Germany combined together. Over 170 countries will experience negative growth this year. The bleak outlook applies to advanced and developing economies alike and this crisis knows no boundaries.
The only shining light in this gloom is India which will remain to be the fastest-growing world economy and engine of global economic growth. India is among a few nations with China which will have a positive GDP growth rate. International Monetary Fund's projection of 1.9 percent GDP growth for India is highest among G20 nations while China is projected to grow at 1.6% this year. However, the IMF has projected a sharp V-shaped recovery for India to around 9% GDP growth rate for next year.
India poised to be the factory of the world
Internationally, a clear trend has been emerging where major US, European & Japanese companies are making strategic plans to move their supply chain and manufacturing out of China. It is no secret that this sentiment has greatly multiplied because of the Corona crisis originating and spreading from China and crippling the global economy. A few weeks ago, a bill was introduced in the US Senate to permanently end US dependence on Chinese manufactured pharma in two years' time. Several European corporations have issued a mandate to partner companies to reduce dependence on China to less than 10% in the next two years.
The Debt to GDP ratio for China is one of the highest in the world and the debt bubble is waiting to burst. Wasteful expenditure like pouring billions into OBOR and redundant investments in Africa for expansionists and extraneous reasons have all created huge debt. Shutting factories, shifting supply chains with most companies seeking safer & cheaper markets than China will mean a severely dented Chinese economy. The servicing of debt will need the Chinese economy and supply chains to run full throttle which does not seem feasible in present circumstances. Thus, the debt bubble for China is real and its economic disintegration is a possibility given the ambitious splurge that happened in the last decade.
The new world economic order will see a diminished role for China due to the possibility of this debt bubble and aversion of other countries to trade. China will no longer remain the only factory of the World and the back office of the world. India is now also poised to become the factory of the world also.
India’s core values of democracy and transparency are cherished globally and most conducive to business and investments. The world’s faith in the leadership of Prime Minister Narendra Modi and Indians, in general, has become even stronger with the exceptional handling of the Coronavirus crisis. No wonder that India already has been the top foreign direct investment destination since May 2014. India being the engine of global economic growth and the lone safe and bright spot in this time of crisis, the global investments, supply chains, and manufacturing is bound to shift to India. Further, the widely acknowledged demographic dividend, skillful and diligent people who have shown exemplary discipline and resilience in such a crisis have strengthened the admiration for India globally and as a stable and safe investment destination.
Decisive momentum to the Indian economy will be provided by crashing prices of crude oil. This will adversely impact OPEC and other oil-producing countries but will benefit oil guzzling nations like India as we will reduce our Oil import bill by half. This provides India a rare opportunity to pump billions of dollars to give further impetus to our economy and attract global investments.
India has waited for centuries for a rare opportunity to reclaim its status as a world leader. This Coronavirus crisis provides us a long-awaited opportunity to make India the leader of the new world order. It is now for all of us to rise to the occasion and seize this golden opportunity and ensure that India gets its deserving place as a global leader in the committee of nations.
Author of this article, Aman Sinha is a Senior Advocate practicing in the Supreme Court of India and National Spokesperson of BJP.
(The views and opinions expressed within the article are the personal opinions of the author. The facts, analysis, assumptions and perspective appearing do not reflect the views of Republic TV/ Republic World/ ARG Outlier Media Pvt. Ltd.)
Updated 20:49 IST, April 23rd 2020