Govt flattened wrong curve: Rajiv Bajaj to Rahul Gandhi

Stressing on the importance of a stimulus to boost demand, Rajiv Bajaj, managing director of Bajaj Auto, said in a video conversation with former Congress president Rahul Gandhi that the 68-day lockdown to flatten the Covid-19 infection curve ended up flattening the “wrong curve” of the economic growth.

He said the lockdown has not been able to check growth of Covid-19, but ended up hurting the economy. “You [the government] flattened the wrong curve. It is not the infection curve, it is the GDP [gross domestic product] curve,” Bajaj told Gandhi.

Bajaj was speaking to Gandhi as part of the series of video conversations with global and Indian thought leaders to discuss the Covid-19 crisis and its consequences on the country’s economy.

According to official data released last week, the economy grew 3.1% in the three months ended March 31, 2020 and 4.2% -- the slowest pace in 11 years -- in the financial year 2019-20. The prolonged nationwide lockdown in the aftermath of the Covid-19 pandemic is expected to dent the growth further.

Days after the release of official GDP data, Moody’s Investors Service cut India’s rating by one notch to the lowest investment grade with a negative outlook, citing growing risks that Asia’s third largest economy will face a prolonged period of slower growth.

On June 2, while addressing businessmen Prime Minister Narendra Modi voiced confidence in the economy’s ability to return to a path of rapid growth, listing it among his government’s top priorities and pledging its commitment to systematic reforms. ”Yes ! We will definitely get our growth back,” Modi said in his speech to a conference on ‘Getting Growth Back’ organised by the Confederation of Indian Industry (CII).

The Bharatiya Janata Party (BJP) dismissed Bajaj’s views and maintained that he is not an expert on Covid-related issues.

“This is Rajiv Bajaj’s personal opinion and in India everyone is allowed to have one. The government has said that we brought time to build health infrastructure so that we can open economic activity. Today, we have robust structures to combat Covid-19 spread,” said BJP spokesperson Gopal Agarwal

In the interaction, Bajaj said India’s lockdown strategy was influenced by the West. Despite being an Asian country, India preferred to tackle the situation like the developed West, instead of looking at what was happening in the East. India looked at Italy, France, Spain, UK and the US, which are not really the right benchmarks , he added.

Bajaj gave examples of Japan and Sweden, where measures such as sanitisation, masks and social distancing were followed, but where the countries tried to keep the wheels of the economy turning. “I think unfortunately, India not only looked West, it went to the wild west. I think we stayed more towards the impervious side. We tried to implement a hard lockdown which was still porous,” he said.

The way India has been locked down is draconian, he said. “This kind of lockdown, I have not heard about from anywhere else,” he added.

India lifted many of the restrictions on movement and economic activity on June 1 and has said even more would be opened up by June 8.

Bajaj also urged Prime Minister Narendra Modi to spell out how the country would move forward after the lockdown is fully lifted, claiming that the unlocking would be anything but smooth.

“I am really distressed because it is a herculean task to open up economic activities. The first problem is to get this fear out of the minds of the people. There has to be a very clear aligned narrative from the PM because, whether right or wrong, when he says something people seem to follow,” he said.

I think the PM needs to tell everyone, this is how we are going to move forward, he said. “All is under control. Don’t be afraid of the viral infections, only a few people are dying, and we have to move forward now.”

Bajaj also mentioned the need for a stimulus to lift the demand and revive the Covid-19 battered economy.

“I strongly believe that a large country such as India cannot save itself out of trouble. It has to sell itself out of trouble. We have to get demand going again. We have to provide something that lifts the mood of the people. We need some mood elevators. I don’t understand why there is no strong initiative, even if it is for a period of six months to one year, to strongly lift the mood of the people and provide a stimulus to demand,” Bajaj said.

The BJP’s Agarwal said the government‘s focus is now on the economy.

Thus far, Gandhi has interacted with former Reserve Bank of India (RBI) governor Raghuram Rajan, Nobel Laureate Professor Abhijit Banerjee, Harvard Professor Ashish Jha, and Swedish epidemiologist Johan Giesecke.