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Saving Lives and Livelihoods Amidst a Once-in-a-Century Crisis 35

fall pointing towards increasing expenditures on consumption.
Figure 30: Trends in Monthly Average Balances in PMJDY Accounts

Source: pmjdy.gov.in

Structural Reforms
1.51 The Indian policymakers also recognized that the ‘supply’ shock induced by the lockdown
would disrupt the productive capacity of the economy. This capacity would need to be strengthened
to meet the pent-up demand once it resumes – any mismatch would lead to macro-economic
instabilities. This was, in effect, an ‘underheating’ of the economy with lack of demand, disruption
of supply chains and anticipated large scale corporate distress. A simple reflating of the economy
through increased government expenditure would, under these circumstances, have led to runaway
inflation especially given the inherent supply-side constraints in India’s food economy. Therefore,
India initiated a slew of multi-sectoral supply-side structural reforms to lend flexibility and resilience
to supply chains as a part of the Atmanirbhar Bharat Mission (ANB) (Table 4). India is the only
country to have undertaken structural reforms on the supply-side at the initial stages of the pandemic.
This far-sighted policy response will generate productivity gains in the medium to long term.

1.52 These reforms primarily focus on strengthening the potential of primary and secondary
sectors of the economy to create jobs. The primary sector in India (agriculture and mining
sectors) contributes around 16 per cent of Gross Value Added (GVA) while it employs around 43
per cent of the workforce (as per PLFS, 2018-19). This indicates the huge potential to provide
gainful employment opportunities for people employed in these sectors. The secondary sector
provides expanded opportunities for formal employment with enhanced incomes, income
stability and social security provisions.

Table 4: Major Structural Reforms Undertaken as a Part of Atmanirbhar Bharat Package

Sector Structural Reform Undertaken
Deregulation and Liberalization of Sectors
Agriculture • Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020
• Farmers (Empowerment and Protection) Agreement of Price Assurance and
Farm Services Act, 2020
• Essential Commodities (Amendment) Act, 2020