Exclusive: “We will see better times by 2024,” Vivek Bajaj on the present and future of Indian economy
The Indian economy is one of the worst-hit by the COVID-19 pandemic. Country-wide lockdown, global economic downturn and associated disruption of demand and supply chains have all adversely affected our economy, leading to a period of slowdown. Mr.Vivek Bajaj, co-founder of StockEdge, India’s top-rated Stock Analysis app in an interview with the Business Upturn shares his views on the present scenario in the economy and the scope for revival.
“The economy was not doing well even before the pandemic. There have been a series of actions by the government that was supposed to revive the economy but actually they became a counterproductive action, for example, GST,” Mr.Bajaj opined.
Despite this, he sees progress in the economy in a few years. According to him, the present situation is not as grave as the Global Financial Crisis that we faced a few years back.
“The economy is on a ventilator. The respiratory support is given in the form of liquidity. The primary source of liquidity is the money printed by the government whose barometer is the interest rate. But when liquidity is given, not all money goes to real assets. A lot of money goes into financial assets leading to the formation of a bubble. When there is excessiveness in a bubble it bursts and a crisis arises,” he said.
Such was the situation during previous economic crises that occurred wherein the Government had to keep interest rates low in order to make the economy move out of the crisis. The low-interest-rate facilitates money to be available for real economic players so that demand is generated.
“I believe that the liquidity bubble in the current scenario is still intact. COVID-19 was just a break which led to some corrections. Till money is available at a cheap rate, which is the lower interest rate, and government globally keeps on printing money in the form of quantitative easing there will be enough money to chase the financial market and the market will keep on going up,” he continued.
In response to the concerns regarding the revival of the economy in a post-COVID-19, Mr.Vivek opined that the pandemic could actually be a good reason for bringing new energy and growth inside the economy.
“I think by mid-2021 we would see a better situation. By that time all the negativity would be settled in and people will have more acceptance of the reality. By 2024 we will obviously see better times,” he concluded.
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