India is experiencing the worst economic recession in its history, but hopes to rebound with 11% growth in fiscal year 2021-2022, which begins in April. The subcontinent is experiencing a spectacular lull on the front lines of the Covid-19 pandemic, which devastated its economy at the time of national confinement imposed without notice from March 25, 2020, leading to massive unemployment in small and medium-sized businesses, and the impoverishment of migrants. The country, which has 10.7 million cases, more than 154,000 deaths, did not count, Monday 1is February, as 8,635 cases, while most restrictions have been lifted since summer 2020.
After a historic drop of almost 24% in the first quarter, gross domestic product (GDP) is finally expected to contract by 7.7% during the 2020-2021 fiscal year, which ends at the end of March. A catastrophe for India, which sees 1 million young people arrive on the job market every month. According to independent economists, the reality could be even harsher because, they point out, the administration does not have the means to measure the growth of the informal sector – 90% of jobs – and which has been hit the hardest by containment.
To revive the activity, the government, which presented, Monday 1is February, its draft budget (394 billion euros) for the 2021-2022 fiscal year, focuses on the development of the health sector and infrastructure. It will double its spending to improve a still very underdeveloped medical and health system in this immense country of 1.3 billion inhabitants: 25.3 billion euros will be invested there, against 10.7 billion euros in 2020. The delays are colossal: India currently spends around 1% of its GDP on health, the lowest percentage among major economies. The country has, for example, only 0.8 doctors per 1000 inhabitants.
Agriculture will receive little help
Regarding infrastructure (roads and highways, railways, subways, water supply), which are also very inadequate, the government will allocate 62.7 billion euros, an increase of 34.5%. But, in this area, the government’s investment is not without ulterior motives. Much of the spending will go to road and rail projects in states where regional elections will be held in the spring: Assam, which Prime Minister Narendra Modi intends to keep, Kerala, West Bengal and Tamil Nadu, which ‘he hopes to conquer.
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