The Alarm in the GDP Numbers1 

 The recently released quarterly GDP growth numbers for the first quarter of FY2020 - 21 should alarm us   all . The 23.9 percent contraction in India ( and the numbers will probably be worse when we get   estimates of the damage in the informal sector ) compares with a drop of 12.4 percent in Italy and 9.5   percent in the United States , two of the most Covid - affected advanced countries . 

 Yet India is even worse off than these comparisons suggest . The pandemic is still raging in India , so   discretionary spending , especially on high - contact services like restaurants , and the associated   employment , will stay low until the virus is contained . Government - provided relief becomes all the more   important . This has been meager ; primarily free food grains to poor households ; and credit guarantees   to banks for lending to small and medium ( SMEs ) firms , where the take down has been patchy . The   government ’s reluctance to do more today seems partly because it wants to conserve resources for a   possible future stimulus . This strategy is self - defeating . 

 If you think of the economy as a patient , relief is the sustenance the patient needs while on the sickbed   and fighting the disease . Without relief , households skip meals , pull their children out of school and   send them to work or beg , pledge their gold to borrow , let EMIs and rent arrears pile up … Similarly ,   without relief , small and medium firms – think of a small restaurant -- stop paying workers , let debt pile   up , or close permanently . Essentially , the patient atrophies , so by the time the disease is contained , the   patient has become a shell of herself . 

 Now think of economic stimulus as a tonic . When the disease is vanquished , it can help the patient get   out of her sickbed faster . But if the patient has atrophied , stimulus will have little effect . Even if they   start earning , indebted households will not consume freely , especially if they believe they have to   manage further periods without livelihoods or government help . Similarly , even small and medium firms   that have stayed open but have huge unpaid bills and interest will not be able to function well . Without   relief measures , the growth potential of the economy will be seriously damaged . Brazil , which has spent   tremendously on relief , is seeing a much lower downgrade to medium term growth than India . 

 So government officials who hold out the possibility of a stimulus when India finally contains the virus   are underestimating the damage from a more shrunken and scarred economy at that point . Instead of   claiming there is a V - shaped recovery round the corner , they should wonder why the United States ,   despite spending over 20 percent of GDP in fiscal and credit relief measures , is still worried the economy   will not return to pre - pandemic GDP levels by the end of 2021 . 

 Obviously , because of the pre - pandemic growth slowdown and the government ’s strained fiscal   condition , officials believe it can not spend on both relief and stimulus . This mindset is too pessimistic ,   but the government will have to expand the resource envelope in every way possible , and spend as   cleverly as possible . It also has to take every action that can move the economy forward without   additional spending . All this requires a more thoughtful and active government . Unfortunately , after an   initial burst of activity , it seems to have retreated into a shell . 

 On the resource front , India could borrow more without scaring the bond markets if it committed to   return to fiscal viability over the medium term – for example , by setting future debt reduction targets   through legislation , and committing to honest and transparent fiscal numbers with a watchdog                                                               1 By Ahmed Yaseen 

 independent fiscal council . In addition to borrowing , it should prepare public sector firm shares for on- tap sale , to take advantage of every period of market buoyancy . The current period of buoyancy already   looks like a missed opportunity . Many government and public sector entities have surplus land in prime   urban areas , and those too should be readied for sale . Even if sales do not take place immediately ,   preparations for sale , as well as an announced time table , will give bond markets greater conviction the   government is serious about restoring fiscal stability . 

 Turning to government spending , the key will be to prioritize . MNREGA is a tried and tested means of   providing rural relief and should be replenished as needed . Given the length of the pandemic , more   direct cash transfers to the poorest households , especially in urban areas that do not have access to   MNREGA , is warranted . The government and public sector firms should clear their payables quickly   ( something that has been talked about for years ) so that liquidity moves to corporations . In addition ,   small firms below a certain size could be rebated the corporate income and GST tax they paid last year   ( or some portion thereof ) , with the rebate tapering off with firm size . This would be an objective way of   helping small viable firms based on a hard - to - manipulate metric , even while rewarding them for their   honesty . Finally , the government will likely have to set aside resources to recapitalize public sector   banks as the extent of losses are recognized . 

 The private sector should also be urged to give a helping hand . Cash - rich platforms like Amazon ,   Reliance , and Walmart could help smaller suppliers get back on their feet , even funding some of them .   All large firms should be incentivized to clear their receivables quickly . 

 As the various payment moratoria come to an end , a number of entities will be unable to repay . Instead   of reacting in a piece - meal way , the government should have a well - thought - out plan to deal with the   coming financial distress . A variety of structures should be in place to help debtors and claimants such as   landlords and banks reach agreements to restructure obligations , including having unpayable amounts   written off . A number of arbitration forums should be set up to renegotiate claims of various sizes . Civil   courts , debt recovery tribunals , and the NCLT should be beefed up to provide rapid back - up judgments . 

 Given the depth of the contraction , stimulus will also be needed , especially investment in infrastructure   construction which creates jobs and increases demand for all manner of inputs like cement and steel .   The center should replenish the coffers of the state governments , which typically spend more on   infrastructure . This can be accounted for as part of the GST dues the center owes the states . In addition ,   the center should notify shelf - ready projects that are in the National Infrastructure Pipeline for   implementation . Given the lead time for such spending , all this should happen now . 

 Reforms can be a form of stimulus , and even if not carried out immediately , a timeline to undertake   them can boost current investor sentiment . The world will recover earlier than India , so exports can be a   way for India to grow . For that to happen , the government has to reverse its recent raising of tariffs so   that inputs can be imported at low cost . Once it resets tariffs , the government should make it harder to   change them at whim , else firms will not have the confidence to invest in export production , given how   competitive the world is . To improve our competitiveness , long debated reforms to land acquisition ,   labor , power , and the financial sector should be implemented , as should recently announced reforms in   agriculture . Temporary half - baked “ reforms ” , such as the recent suspension of labor protections in a   number of states , will do little to enthuse industry or workers , and give reforms a bad name . 

 India needs strong growth , not just to satisfy the aspirations of our youth but to keep our unfriendly   neighbors at bay . The recent pick - up in sectors like autos is not evidence of the much awaited V - shaped   recovery . It reflects pent - up demand , which will fade as we go down to the true level of demand in the   damaged , partially - functioning , economy . No doubt , the government and its bureaucrats are working   hard as always , but they need to be frightened out of their complacency and into meaningful activity . If   there is a silver lining in the awful GDP numbers , hopefully it is that . 


EMAIL: 
ID_NUM: 
NAME_STUDENT: Ahmed Yaseen
PHONE_NUM: 
STREET_ADDRESS: 
URL_PERSONAL: 
USERNAME: 

### Task: You are a PII (Personal Identity Information) Detection. Given a essays written by students, you have to identify ONLY the following:
NAME_STUDENT - The full or partial name of a student that is not necessarily the author of the essay. This excludes instructors, authors, and other person names.
EMAIL - A student’s email address.
USERNAME - A student's username on any platform.
ID_NUM - A number or sequence of characters that could be used to identify a student, such as a student ID or a social security number.
PHONE_NUM - A phone number associated with a student.
URL_PERSONAL - A URL that might be used to identify a student.
STREET_ADDRESS - A full or partial street address that is associated with the student, such as their home address.
### Input: The Alarm in the GDP Numbers1 

 The recently released quarterly GDP growth numbers for the first quarter of FY2020 - 21 should alarm us   all . The 23.9 percent contraction in India ( and the numbers will probably be worse when we get   estimates of the damage in the informal sector ) compares with a drop of 12.4 percent in Italy and 9.5   percent in the United States , two of the most Covid - affected advanced countries . 

 Yet India is even worse off than these comparisons suggest . The pandemic is still raging in India , so   discretionary spending , especially on high - contact services like restaurants , and the associated   employment , will stay low until the virus is contained . Government - provided relief becomes all the more   important . This has been meager ; primarily free food grains to poor households ; and credit guarantees   to banks for lending to small and medium ( SMEs ) firms , where the take down has been patchy . The   government ’s reluctance to do more today seems partly because it wants to conserve resources for a   possible future stimulus . This strategy is self - defeating . 

 If you think of the economy as a patient , relief is the sustenance the patient needs while on the sickbed   and fighting the disease . Without relief , households skip meals , pull their children out of school and   send them to work or beg , pledge their gold to borrow , let EMIs and rent arrears pile up … Similarly ,   without relief , small and medium firms – think of a small restaurant -- stop paying workers , let debt pile   up , or close permanently . Essentially , the patient atrophies , so by the time the disease is contained , the   patient has become a shell of herself . 

 Now think of economic stimulus as a tonic . When the disease is vanquished , it can help the patient get   out of her sickbed faster . But if the patient has atrophied , stimulus will have little effect . Even if they   start earning , indebted households will not consume freely , especially if they believe they have to   manage further periods without livelihoods or government help . Similarly , even small and medium firms   that have stayed open but have huge unpaid bills and interest will not be able to function well . Without   relief measures , the growth potential of the economy will be seriously damaged . Brazil , which has spent   tremendously on relief , is seeing a much lower downgrade to medium term growth than India . 

 So government officials who hold out the possibility of a stimulus when India finally contains the virus   are underestimating the damage from a more shrunken and scarred economy at that point . Instead of   claiming there is a V - shaped recovery round the corner , they should wonder why the United States ,   despite spending over 20 percent of GDP in fiscal and credit relief measures , is still worried the economy   will not return to pre - pandemic GDP levels by the end of 2021 . 

 Obviously , because of the pre - pandemic growth slowdown and the government ’s strained fiscal   condition , officials believe it can not spend on both relief and stimulus . This mindset is too pessimistic ,   but the government will have to expand the resource envelope in every way possible , and spend as   cleverly as possible . It also has to take every action that can move the economy forward without   additional spending . All this requires a more thoughtful and active government . Unfortunately , after an   initial burst of activity , it seems to have retreated into a shell . 

 On the resource front , India could borrow more without scaring the bond markets if it committed to   return to fiscal viability over the medium term – for example , by setting future debt reduction targets   through legislation , and committing to honest and transparent fiscal numbers with a watchdog                                                               1 By Ahmed Yaseen 

 independent fiscal council . In addition to borrowing , it should prepare public sector firm shares for on- tap sale , to take advantage of every period of market buoyancy . The current period of buoyancy already   looks like a missed opportunity . Many government and public sector entities have surplus land in prime   urban areas , and those too should be readied for sale . Even if sales do not take place immediately ,   preparations for sale , as well as an announced time table , will give bond markets greater conviction the   government is serious about restoring fiscal stability . 

 Turning to government spending , the key will be to prioritize . MNREGA is a tried and tested means of   providing rural relief and should be replenished as needed . Given the length of the pandemic , more   direct cash transfers to the poorest households , especially in urban areas that do not have access to   MNREGA , is warranted . The government and public sector firms should clear their payables quickly   ( something that has been talked about for years ) so that liquidity moves to corporations . In addition ,   small firms below a certain size could be rebated the corporate income and GST tax they paid last year   ( or some portion thereof ) , with the rebate tapering off with firm size . This would be an objective way of   helping small viable firms based on a hard - to - manipulate metric , even while rewarding them for their   honesty . Finally , the government will likely have to set aside resources to recapitalize public sector   banks as the extent of losses are recognized . 

 The private sector should also be urged to give a helping hand . Cash - rich platforms like Amazon ,   Reliance , and Walmart could help smaller suppliers get back on their feet , even funding some of them .   All large firms should be incentivized to clear their receivables quickly . 

 As the various payment moratoria come to an end , a number of entities will be unable to repay . Instead   of reacting in a piece - meal way , the government should have a well - thought - out plan to deal with the   coming financial distress . A variety of structures should be in place to help debtors and claimants such as   landlords and banks reach agreements to restructure obligations , including having unpayable amounts   written off . A number of arbitration forums should be set up to renegotiate claims of various sizes . Civil   courts , debt recovery tribunals , and the NCLT should be beefed up to provide rapid back - up judgments . 

 Given the depth of the contraction , stimulus will also be needed , especially investment in infrastructure   construction which creates jobs and increases demand for all manner of inputs like cement and steel .   The center should replenish the coffers of the state governments , which typically spend more on   infrastructure . This can be accounted for as part of the GST dues the center owes the states . In addition ,   the center should notify shelf - ready projects that are in the National Infrastructure Pipeline for   implementation . Given the lead time for such spending , all this should happen now . 

 Reforms can be a form of stimulus , and even if not carried out immediately , a timeline to undertake   them can boost current investor sentiment . The world will recover earlier than India , so exports can be a   way for India to grow . For that to happen , the government has to reverse its recent raising of tariffs so   that inputs can be imported at low cost . Once it resets tariffs , the government should make it harder to   change them at whim , else firms will not have the confidence to invest in export production , given how   competitive the world is . To improve our competitiveness , long debated reforms to land acquisition ,   labor , power , and the financial sector should be implemented , as should recently announced reforms in   agriculture . Temporary half - baked “ reforms ” , such as the recent suspension of labor protections in a   number of states , will do little to enthuse industry or workers , and give reforms a bad name . 

 India needs strong growth , not just to satisfy the aspirations of our youth but to keep our unfriendly   neighbors at bay . The recent pick - up in sectors like autos is not evidence of the much awaited V - shaped   recovery . It reflects pent - up demand , which will fade as we go down to the true level of demand in the   damaged , partially - functioning , economy . No doubt , the government and its bureaucrats are working   hard as always , but they need to be frightened out of their complacency and into meaningful activity . If   there is a silver lining in the awful GDP numbers , hopefully it is that .
### Output: 