Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
5. Explain in the backdrop of the COVID-19 pandemic, how dependence on a more liberalized economic model has proved to be counter-productive and disastrous for the country. (250 words)
Reference: The Hindu
Why this question:
The authors of this article argue that the COVID-19 pandemic reveals how dependence on a more liberalized economic model has proved to be counter-productive and disastrous in the current scenario. Thus the question.
Key demand of the question:
One must evaluate the challenges related to the liberalized economic model amidst the COVID-19 pandemic.
Explain – Clarify the topic by giving a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.
Structure of the answer:
Briefly set the background of the question’s context.
To start with, explain the change in the industrial model in the past – in the late 1980s, transnational corporations started shifting their production base to developing countries, especially Asia, in search of cheap labour and raw materials. Developed countries supported the move as it helped them shift the polluting and labour-intensive industries to other countries, while still retaining the ownership. Thus, the world witnessed the development of global supply chains in many products. Discuss the current case; explain the fallacies brought out by the COVID-19 situation. Take hints from the article to form your answer content. Present the case of India.
Conclude that the current pandemic should lead the countries to rethink and reevaluate the economic efficiency theory propounded by the LPG principle. There should be the emphasis on an industrial policy that helps maintain core capacity in essential products.