A big Keynesian spend by the Sarkar can help by putting cash into Jan-Dhan accounts, writes SANJAY DANGI

2021 wasn’t exactly a year we would like to remember in India. When the worst reverses of 2020 were over, and we expected a sharp uptick to meet pent-up demand, unexpected features kept the engines cool, like a chip shortage slowing automobile factories, and a global container shortage slowing imports and exports. Economic predictions are a mug’s game – we get credit if we get them right, or we find explanations if we don’t. There are six economic trends that I foresee in 2022, but take these predictions with the right spirit of caution and trust.

1. A sharp recovery – Unless omicron makes a mega impact (and it still might), I see a mega-recovery in economic indicators – jobs, consumer demand, sales, capacity expansion and more jobs, creating a virtuous cycle. A big Keynesian spend by the Sarkar can help by putting cash into Jan-Dhan accounts.
2. Further digitization of the economy – Sitting at home and buying stuff online is now something the middle class is comfortable with; UPI payments through phones are now accepted by not just shops but vegetable and bhelpuri vendors as well. Fewer notes and coins being touched by fewer people is also good for our health.
3. Crypto is here to stay. It may not have met its promise as an alternative currency to that issued by governments, and it may still be volatile, but it is not going away. Governments, instead of distrusting it or banning it, need to find a way to work with them – and make sure they are not driven underground.
4. NFTs – It looks like a fad now, and the first reaction has been cynicism from old money people. But they are here to say, and are apt digital assets for a digitized era. If the gormint plays its cards well, it can raise a ton of cash from them.
5. De-bubbling – The BSE Sensex has doubled from May to November; the speed indicates a bubble. I hope to be proved wrong, but if the Omicron variant does not burst the bubble, something else might. If the recovery is sustained with some wise policies from the government, such as harmonizing and lowering taxes, well and good – else, it always pays to be prepared for the worst.
6. Slowdown of reforms – 2022 is a year of important elections and leaves less than half a term for a government that surely wants to be re-elected. The non-privatization of two PSU banks (aka white elephants) is an example. I can predict no new or bold reforms, but I pray for no U-turns either. Unless the current sarkar reverses the mistakes of all former governments (including itself) and lays emphasis on educating the public on why the state needs to recede from more aspects of public life, reforms will only chug on like an unreliable chhakda.

Two things that should be trends but aren’t – greater spending on education and healthcare. Children’s reading and arithmetic levels have slipped in the last academic year as many simply sat at home playing or working, because the digital infrastructure to support remote learning was patchy outside the metros. Healthcare simply saw our entire set up crumble – public or private. The former is good at preventive measures, such as rolling out the world’s largest vaccination drive for the second time (polio being the first), but neither public nor private hospitals are able to cope with the surge in patients. A few shining examples of administration apart, the delta wave laid our pretenses bare. Let 2022 not leave us an omicron in this regard.

About the Author

Sanjai Dangi, Director – Authum Investment and Infrastructure Ltd., & Financial investor to many startups, is a Chartered Accountant and Company Secretary. He is a first-generation entrepreneur with an experience of more than 25 years in Investment Banking. He is also an avid investor in early-to-growth stage companies and a philanthropist