 Hello and let's talk about the Goldman Sachs report on India. The investment banking firm in its report says that the country's GDP will shrink by 5% in the year ending 2021. The bank had earlier said that there would be a negative 0.4% growth. The bank's report confirms what we all see on the ground every day. The April-June quarter will be disastrous for the economy. This is not helped by the fact that the actual spending by the government of India is quite low when compared to other countries when it comes to relief packages. Meanwhile, the pandemic shows no sign of slowing down. Today morning's figures from the government show that over 6,000 cases were reported in the preceding 24 hours. So where do we go from here? We talk to journalist Anindya Chakravarty to find out. Anindya, thank you so much for joining us. So we have the Goldman Sachs report and of course there are some media organizations in India which are spinning it in a triumphalist way. They are saying that there's going to be a 20% growth in the third quarter as opposed to what the report actually says. But the report itself says that it's been the worst recession since 1979. Exactly. It will be a 5% decline. So going beyond the numbers, what exactly does this mean? I think we need to first take a comparison because Goldman Sachs, one is to take everything with a pinch of salt. It's not as if Goldman Sachs is the greatest record in the world of predicting things. But they put big money into economies. They put big money into markets. So it's part of their job to do it so that they can make money, not to basically start. They have no academic interest in knowing what's going to happen in India. They're only interested in what returns they'll get. Now, they had predicted that before the lockdown, before that India will grow by about 5.8%, if I'm not wrong, in 2021, 5.8%. So take that as the threshold. 5.8% growth versus a 5% decline or a recession of 5%, which they're saying is the worst since 1979. And we know 1979 was basically the oil shock and they had a terrible drought. There was massive political uncertainty. The Janta government, there was infighting happening. The Congress was trying to break it down. Indira Gandhi, Murad Jidesai was put up. So all of that put together was the first case of policy paralysis, as we know, was 1979. So that was the worst year in terms of contraction of the economy. If the economy was 100, it dropped sharply. This time, if the economy was 100 last day, it's going to be 95. That is what Goldman Sachs is predicting. And as you said that some media organizations, I'm glad you did call them news organizations. Because entertainment is also media. So none of these are news organizations. They're basically fabricators. Now Goldman Sachs does say that in the second, what they call third quarter, which in our fiscal terms is the second quarter, which is the September quarter, July to September quarter, there'll be 20% rebound. Now, obviously, if you've locked everything down and the base has gone down, it'll go up. But after that, they're saying that growth will moderate. It'll be 14% in the last third quarter and in the last quarter of 2021, it is going to drop to about 6.5%, which is going to make it a 5% contraction of the economy. And they actually have a very good reason to say that. They're saying that one, of course, that India were locked down more than they expected. The coronavirus spread faster than they expected in their previous estimates. Also, they're saying that India is not doing enough to spend. It's as simple as that. And we know what that means, Prashant. Right. And this is, of course, even calculating that the lockdown is going to end by May. And with the number of cases increasing, we can't even really say for sure that economic activity is going to resume as normal. You know, one of the things that one has to look at, and the report actually gives some details there, is that in March, the lockdown was only for the last week. But March figures are pretty bad. Even CMI's March numbers for employment are pretty bad. So it's not as if that March last week lockdown could have completely destroyed the remaining three weeks. So the things were going bad even earlier. And as Goldman Sachs's report shows that whether it is exports, imports, growth, everything was poor in March as well. So just a quarter of a month of lockdown had thrown things out of whack. Now, Goldman Sachs has given a very, they said that, OK, 45% of India's GDP comes from the red zone, which has seen the maximum kind of restrictions. And because of that, there has been a huge decline in earnings and output in several sectors, especially in April, when things were the worst. And after that, a little bit of opening up has taken place. As they've said, entertainment, hospitality, education, they have lost about 95% of their earnings in terms of their contribution to GDP. If you look at things like aviation, transport, all of those have been very badly hit. So all of these things, 80 to 90%, 95% in some sectors, 40, 50%. There's been a decline in utilization and use. And I think even Goldman Sachs will not admit this, but this is a problem which already existed before the lockdown. We know that India's economy was doing badly before the lockdown. We've been talking about how the government needs to stimulate from the time of the budget and it did not. And now it has given nothing. So Goldman Sachs actually has a nice, the report has a good graph out there, which gives a comparison between how much India is actually spending in terms of discretionary government spending, where what the money government spends goes into the pockets of businesses and consumers. Because ultimately they have to spend. You can say the take as many loans as you want, but who's going to take a loan if they don't have a job? But here's the thing that India is spending in all these six rounds of stimulus announcements that Lassitha Raman did, actually just 1.27% of GDP. That's the additional spending that India is doing. Compare that to the US where there's an additional discretionary government spending of 11% to 12%. The emerging markets on an average are doing between 3.4% to 4%, 5% to 4%. The developed markets are doing about on an average 8%. China is doing 5% to 6%. India is doing just 1.27% to 1.3%. So Goldman Sachs, a conservative, conservative output, which would never tell you they'd increase your fiscal deficit, spend more, they're totally against all these things. They're saying that we can understand that India has a limited fiscal space to spend. But even then, the cost of not spending is much higher than the cost of spending. So even they're saying that, okay, not 20 lakh crore, you should have spent, which is 10% of GDP in nominal terms, you needed to have spent at least 5%, which is 10 lakh crore. Instead of that, you're spending virtually nothing, maybe 2.5 to 2.6 lakh crore, which is frankly nothing in the current circumstances. And so in this context, again, last week when we talked, we talked about what Nirmala Sitaraman had announced till then, which is till Friday. And she announced another fresh round on Saturday and on Sunday. So how do you evaluate the overall package in terms of some of these aspects we discussed? My friend Ravish Kumar had done a short video clip, which he sent to me. I think it must have gone on air as well, where he showed that when a package comes, a lot of times there's a large amount of cardboard, then you open it, there's a lot of bubble wrap, it looks like a huge package. By the time you open it, there's a very small thing inside. I would say that this is one of those cases, and I actually once ordered, I think one of those pen drives, and it came in a large box. And when I opened it, there was a small stone inside. So I had to complete, and Amazon obviously refunded the money immediately. So I think this is one of those cases where you complain to Amazon that the package came inside. That is what this package essentially is. Take loans, take loans. Who's going to take a loan when you don't have a job? I got a call from someone who doesn't know me and he had got my number. And for some strange reason, this gentleman thought that I probably will be able to give him some advice. And he said that I don't have a job, and now the credit card companies are at my thing. My account has been frozen. What should I do? And you can understand that this is actually a complete reversal of what governments, one after the other, have been telling the middle class we do. And again, they're saying the same thing. They've been telling the middle class, take a loan by a car. You will be able to pay it off. Take a loan by a house. You will prosper. Again, when people don't have jobs, they have no hope of earning extra. The government is telling entrepreneurs to take loans and hire people, and effectively therefore telling people to take a loan. Because what is this huge RBI liquidity 8 lakh crore all about? Essentially, we know ultimately banks make those personal loan calls because actually, delinquency is still lower in this space than anywhere else. And so finally, if we look at the Goldman Sachs report itself, because it says that there is a great contraction ahead, what are the policy options ahead for the government right now? In case, for instance, they do want to sort of even look at changing track. The government is basically now reacting by saying that the coronavirus doesn't exist. Clearly, the signal that it is sending is that it is not going to spend. It's basically saying, look, it doesn't exist. So you don't need a middle seat to be left in an aircraft, but it's a short haul flight. Why do you need any kind of quarantine? I don't understand this. Why did you keep us in our house if all this was not required? I saw some report, I need to check that again, that apparently some government department has said that asymptomatic people are not a problem. So essentially, the government is saying, we messed up. The economy is completely destroyed. We have no plan. We are unable to do anything. So what are we going to do? We'll pretend it doesn't exist. We'll pretend it doesn't exist. We'll pretend that there are no numbers. So obviously, India has a very low apparently infection rate compared to population. You hardly tested anyone. 20-25 lakh tests done. Probably the lowest per million population. So we are essentially in a situation which if this government actually pretends that there is no need for a lockdown, why this lockdown came up in the first place, no one knows. So that's the main point. It's a clear case of mismanagement. And I frankly do not expect anything from the government. There is one point that I would like to end with. And I think that the government is a little worried. The central government I think is a little worried about the political impact of what has happened with migrant laborers. Now, as you know, I've been arguing that once a migrant worker goes back home, they kind of get some amount of relief and then they forget about what has happened to them. But increasingly, there is a sense that migrant workers might not come back to work. Now, this is a double-edged sword. You can keep giving basic subsistence-level existence to migrant workers by giving them money through government schemes, free food, some amount of work, 20, 30 days a year, which will keep them at subsistence level. But once they get used to that, once they think that this is all we can get, that there is no point in going to a city where I could get stuck, which doesn't care about me. And then that's a problem, which is why some of these journalists I see, anchors, popular news anchors, on Twitter for the last two days, they've been criticizing Yogi Adityanath for holding up buses that were being sent by the Congress for migrant workers. Now, you wonder what is making them, these same people who were tweeting that, oh, the Congress has sent a list of buses, which are actually two-wheelers and stuff like that, apparently, they were criticizing and making fun of it. They constantly make fun of the opposition. They constantly say, Modiji is great. What is making them, these same people who covered Yogi Adityanath feeding his cows and stuff like that, what is making them criticize? I think there is some amount of fear in the central leadership, which is essentially Modi Shah, that this might cost them politically, which is why these people have been told to criticize that kind of, because I don't believe anything comes from their conscience, to be absolutely honest. So there could be some political impact which will force the Modi government to act quickly. I don't know. Sure. Thank you so much, Anandya, for talking to us. Thank you. In our next segment, we bring you a report from Karwai Mohabbat on the ground situation in Delhi. The livelihoods of lakhs of people have been destroyed and there's been almost no measures to help them recover in a sustainable way. Here is a report from the slums of Tughlaqabad. There's sugar and leaves in it. Children cry for tea and milk. Now tell me, we are passing our time by drinking water. Modi and Ketri Baal are famous in Delhi and India. We will help the poor and not let them worry about anything. Now the poor are so worried. Now where are they going, Modi Ketri Baal? Why aren't they helping now? Today we are in Tughlaqabad, Delhi. In the shade of the fort, this is an old hut. Even in the evening, the poor are living here. This is the old house of Tughlaqabad. They sell free goods. We used to sell tubs, buy old clothes, sell them and then we used to walk around. It feels like there are clothes to reach the car. We used to buy big cars and clothes to reach the car. We used to buy clothes in the factory. We used to pay the children for our clothes. We used to pay Rs.1,015. Our children used to go to work to get tea and water. We used to beg for food. And our children used to pay us for our clothes. They used to pay us Rs.20, Rs.10, Rs.5. We used to buy things like this. One day, we used to earn Rs.50, we used to earn Rs.100 for our children and women. We used to run expenses. What are you doing? People tell us that they work in different ways. Some come from Rajasthan, some come from Madhya Pradesh. We are going to eat food. Sir, we are eating rice. We are going to eat food. The heat is also increasing. The police tell us to stay inside the house. The house becomes a small hut. So many people work in different ways. There is no question of social distancing. There are mosquitoes and mosquitoes. They leave the house and the police run away. The mosquitoes eat a lot. What do we do? It is very hot. It is also very hot. There is a lot of water in the house. The water in the house is filled with water. They don't let the tanker fill the house. They don't let the tanker fill the house. We don't come here for 10-12 days. What do we do? We wash our hands, drink milk. We need as much water as we need to eat food. We need as much water as we need to eat food and drink. We are not able to get that water. The food you gave us, we eat it and sit there. We eat raw rice and eat it. The children get sick. There is no food. We are seeing food in these houses. Many people have said that they have not been able to eat food for 4-5 days. They have been working for a few days with the help they are getting. There was oil, turmeric powder, chili powder, rice powder and so on. We left for 15-16 days. That's why we were remembering that if the brother comes, he will give us some water to eat. Ever since they have heard that the lockdown has increased, it is very sad that how will we survive these days? When our children don't have bread, they have to pay for it. If we had sold it to the children, they would have paid for it. They don't know if they are paying or not. On our side, we are announcing to Modi and Ketri Baal that we are getting so worried due to the COVID-19 pandemic. Help us. This is not fair. We will not help them. People will die and say that they are sick. Take them and burn them. This will not happen. All of them will die and we will starve to death. This is the story of Delhi. What will be the situation in the distant regions of the country? It will be difficult to imagine.