Modi's New Swadeshi Deal

The prime minister unveils a Rs 20 lakh crore financial stimulus and vision of self-reliance. But will it revive India’s Covid-stricken economy?

- Raj Chengappa

Prime Minister Narendra Modi has the uncanny knack of turning adversity into opportunity. When he began his address to the nation on May 12—his fifth since he imposed an unprecedented nationwide lockdown—most expected him to dwell on how his government was handling the COVID-19 pandemic and on plans for an exit strategy. After all, the number of coronavirus cases since the country went into lockdown on March 25 had risen from 564 to 70,756, and over 2,293 Indians had died of the disease. The lockdown had already been extended twice and will complete 55 days on May 17 when the third phase ends. Yet, half the country’s 733 districts remain in the red and orange zones where most of the restrictions on movement will continue into Lockdown 4.0. With these districts accounting for as much as half of India’s GDP, the prospects for economic revival look bleak. More ominously, there are no signs of the infection curve flattening to indicate that the virus has been effectively contained.

Rather than highlight these concerns as expected, the prime minister instead chose the occasion to present a soaring vision of India’s ability to emerge as a strong, self-reliant nation that will also be a world leader. To quell the rising sense of disbelief his words may have provoked, he talked money, announcing a financial stimulus package of Rs 20 lakh crore, equivalent to 10 per cent of the GDP, to revive India’s COVID-stricken economy. This is almost double the amount most experts had been demanding at the beginning of the lockdown. Terming the package