Tarun Ramadorai, Professor of Financial Economics at Imperial Business School, was on 29 April.聽聽
Tarun,聽an expert聽on the Indian economy,聽was聽asked about what the post-pandemic world holds for the country鈥檚 economy and the stark choices聽faced by聽the Indian government while coronavirus (COVID-19) is still spreading.聽
鈥淚f we were to replace the consumption equivalent for wage earning households [in India]...the monthly costs, depending on how big you want the fiscal support measure to be, ranges between聽0.65 per cent and 1.65 per cent of GDP per month, which is an enormous amount of money to think about spending,鈥 he said.聽聽
However, he went on to stress the difficult nature of the trade-off, since聽there will聽be聽potentially聽devastating public health consequences and costs if India chooses instead to聽release the lockdown聽and allow people to return to work.聽聽聽
More positively, Tarun highlighted the potential mitigating factors, which could mean India isn鈥檛 as badly hit by a recession as is currently expected, stressing that聽the country's population聽is comparatively young compared to more developed economies.聽聽
鈥淭he old age dependency ratio聽鈥撀爐he fraction of elderly people above 65 to the working age population聽鈥 is 10-12 per cent in India, which is lower than comparable numbers in most advanced economies,聽and the urban share is only 35 per cent,鈥 he said.聽聽
Offering a view on what a post-pandemic world and economy will look like, Tarun聽suggested the picture could be a mixed one, with a decline in聽labour聽intensity in manufacturing聽as companies increasingly adopt capital-intensive聽technologies 鈥 something that will hit developing countries hardest.聽 聽
Finishing on an optimistic note, he said he hoped the crisis would also result in 鈥渁 greater spirit of solidarity across the globe.鈥澛
聽for the full interview with Tarun聽
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