The Road To Recovery

The pandemic did more than attack our health—it hit our wallets too. But smart, sensible investments can bring personal finances back on track in 2021

- Devangshu Datta

2020 was a strange, unsettling year. The global economy began shutting down around February–March as the pandemic took hold. A year later, thousands are still dying every day from COVID-19. Tens of millions have lost livelihoods. Economic activity is nowhere near ‘business as usual’.

Economically, India was among the worst-affected countries. Quite apart from losing loved ones, many white-collar Indians lost jobs or suffered deep pay cuts. Many businesses have been pushed to the edge of bankruptcy, or beyond. It may be March 2022 before the economy recovers and grows back to the same size as it was in December 2019, before the pandemic hit. However, this doesn’t mean 2021 is all doom and gloom. The coming financial year—April 2021 to March 2022—is likely to see growth across many sectors, although this will be uneven.

This year is also bound to see a lot of political and social unrest, which would have inevitable negative consequences: the ranks of the unemployed have grown and that always contributes to political volatility. This is written well before the Budget so I’m sticking my neck out in the following predictions. By the time you read this, you’ll know the actual Budget. If the government is sensible—and this is a big ‘if’—it will not raise income taxes or corporate taxes. People need money in their pockets to fuel consumption and help a rebound. If the government is sensible, it will also try to announce bigticket projects to generate employment. Of course, it must also roll out the world’s largest vaccine programme, which will, in itself, require huge funding.