Narendra Modi’s New Deal
With some of its biggest spends in critical developmental areas like healthcare and infrastructure, Prime Minister Narendra Modi’s government has presented, in a sense, his version of the New Deal after a historic health crisis during the Covid-19 pandemic.
Most Budgets, the good ones at least, ask, and aim to answer, a series of fundamental questions on one key issue—what would fuel growth in the future? But after an impossible to predict pandemic that shut down the world and sent economic activity tumbling down, that is not enough.
Some more radical change is needed.
Between 1933 and 1939, American President Franklin D. Roosevelt announced a slew of government expenditure, especially in infrastructure, and economic reforms, which transformed the U.S. economy, creating a job swell, and a trickle down of prosperity at the grassroots. Famously the New Deal offered 3Rs—relief, recovery, and reform. Relief for those who needed urgent economic support, measures to bring the economy back to the normal gear after the early years (1929-33) of the Great Depression which the economist Milton Friedman called the Great Contraction, and major financial reform, including a banking makeover.
The economic contraction of the Great Depression is comparable to what happened to the shutdown experienced by global economies during Covid-19. In response, Finance Minister Nirmala Sitharaman has announced a 137% increase in the health budget. Of this, ₹64,180 crore is for the PM AtmaNirbhar Swasth Bharat Yojana, which targets interventions at every district of the country. The combining of AtmaNirbhar Bharat, an effort to build India’s industrial base, with the idea of mass good health is important because it underlines that which has not been adequately underlined since India started opening up its economy in 1991—growth and the health of the population that fuels that growth must go hand in hand. Read More at https://www.fortuneindia.com/polemicist/narendra-modis-new-deal/105134