LIC MD on how India can fight against the impact of Covid on economy

LIC Managing Director Vipin Anand says in India's fight against coronavirus, money is not an issue. He points out that the increasing number of Covid-19 cases does not give people the confidence to start spending money, which in turn is affecting India's growth.

What is your understanding of the economy? There is a clear revival in the digital business, rural business but there are deep pockets of stress at least in the corporate sector.
As far as the insurance industry is concerned, we are definitely seeing a V-shaped recovery. We are positive on new premium and renewal premium. Investments are great in the current financial year. So far, we have invested more than Rs 2 lakh crore altogether.

As far as the contribution of the insurance sector to the revival story is concerned, we are well on the way.

On the general situation, I would like to say that money is not really the issue. What is possibly required is a little more confidence in everybody for facing the situation. And right now, the biggest issue we have is still the health issue. The number of corona cases is substantial every day and that does not give people the confidence to really start spending money.

When you are looking at the manufacturing sector and the industrial sector, the growth essentially comes from an uptick in the spending, which is not happening. The public needs to have confidence that they can spend the money and that they will be able to earn it back.

Similarly, we need the industry to put in money for taking loans from banks or any other institution. If they put the money in new projects or in working capital, they are not going to be saddled with the inventory and more loans. Banks have already had a PCA problem. They also naturally tend to be cautious about choosing the people to whom they are willing to give money. Still, a lot of banks are under PCA and even though they have the money they are not in a position to lend. All these things need to be addressed.

One thing which we need to be very clear about is that we are still in the first phase of corona. So, it is not going to go away any day soon. We need to have a strategy of fighting a long battle. Looking at the state of the economy, we need to create health and hygiene discipline which seems to be a bit short. After the opening of the lockdown, that needs to come back very strongly and the government will need to be very tough on enforcing this discipline if we are to build that kind of confidence in everybody about working in these circumstances.

What is your sense on Atmanirbhar Bharat and how effective this is going to be?
Low-interest rates and availability of finances are necessary conditions but they are not the only ones. Under the current circumstances, today every country is focussing on the domestic market and I think India in that regard is uniquely placed. We have a huge domestic market and we do not really need to look at exports.

One thing we need to realise is that there is a new normal and we have to understand the new reality and start working along with that. There are jobs which have totally vanished, they are not going to come back and there are new jobs which have come up during this pandemic which will create huge possibilities for employment. We need to understand this situation, identify this situation, the jobs which are now coming up, reskill the people and move forward.

If we want to reboot the economy, the first thing which has to be is that the fear of corona has to go away. We have to have an absolute discipline regarding using of masks, social distancing, sanitising and ensuring that the people who are necessary for the workplace are actually there.

We have a huge domestic market which offers us a huge opportunity but the issue is confidence. We need to immediately come up with adequate infrastructure creation and development.