As part of the 21st annual Warwick Economics Summit, Sanjeev Sanyal delivered a riveting keynote address to our virtual audience on 4th February, 2022.
Below, you will find our official Summit Press Release for the event, which summarises the speech's highlights, and is accompanied by a collection of the very best quotes from Sanjeev Sanyal at WES 2022.
As Principal Economic Advisor in India's Ministry of Finance, Sanjeev Sanyal is impeccably placed to speak about the upward growth trajectory of the Indian economy, as it emerges from the Covid-19 pandemic. This was the subject of his insightful talk at the student-run Warwick Economics Summit on 4th February, where he addressed key differences in the policy approach, and conceptualisation of the pandemic, adopted by Indian legislators (relative to those in other major world economies).
First, was the ability of Indian economists to well-identify "the first impact of Covid," which "was not on demand but on supply," and caused by successive lockdowns and forced business closure. Thus, appropriate policies were enacted, mindful that “you first need to open things up before you invest in demand”. Second, was the peril of directing an economy as large as India’s: “once I have taken a particular direction, I’m stuck with it. It’s very difficult to change direction in a country the size of India”.
Finally, the financial barbell strategy used by the Indian Ministry of Finance involved “hedging for the very worst outcome” in the early stages, when very little was known about Covid. When taken together, these differences meant that India “came up with a lot of medium sized packages,” and was able to use “resources in a much more targeted way,” rather than commit to one large package throughout. This culminated in a discussion of the positive outlook for state infrastructural investment, as well as a booming startup culture, in a remarkably recovering Indian economy.
“In India, with 1.35 billion people, I know that once I have taken a particular direction, I’m stuck with it. It’s very difficult to change direction in a country the size of India, with that population.”
“The amount of expenditure we are doing is well above what we had before Covid, and this is a key reason why you’ve seen the economy revive (...) we will intend to dramatically ramp up infrastructure spending on highways, airports and other things. This is something this particular government has been particularly good at doing.”
“Interestingly, there has been an explosion of startups now (...) for whatever reason there seems to be a boom of startups in the last one year; it was just a simple explosion. (...) Young people seem to have suddenly got up and decided that they’re going to go and take risks in the face of all this uncertainty.”
"First of all, our view was that the first impact of Covid was not on demand but on supply. (...) Simple re-inflating demand when you shut down malls and restaurants and so on is not going to help, because the real problem is you shut down stuff and so you first need to open things up before you invest in demand”
“Rather than come up with one big package, we came up with a lot of medium-sized packages (...) we had resources along the way to be able to respond and use our resources in a much more target way”
“The primary way in which most countries dealt with Covid was by essentially ramping up demand and managing demand, however in India we actually spent a lot of effort in deregulating and doing supply side reforms”
Press release written by Ingrid Bahnemann
VIDEO RECORDING OF THE TALK:
You will find the video recording of Sanjeev Sanyal's full talk, delivered at WES 2022, here: https://www.dropbox.com/sh/onpn6vmjv9dknaj/AAAW8_FhPJirfNLNQyENpwwNa/Day%201?dl=0&lst=&preview=SanjeevSanyal_Day1.mp4
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