The worst flood in nearly a century, over July-August 2018 in God’s own country, Kerala has manifold consequences. Adverse fall in demand especially in a consumption state like Kerala is the crux right now. Agriculture and tourism along with the IT sector are worst hit. With sharp economic effects, prompt recovery needs farsightedness in the decisions taken further. Economics is all about choices and decision making under the guidelines of which human behaviour is studied. The response to the tragedy by people transcending all boundaries, non-profit organisations, government of other countries is very close to inspirational. The pooled aid is absolutely spontaneous without any prior measurement which magnifies the phenomenal response.
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The show stealer is the fact that without addressing the catastrophe from point of views nor juggling the blame game between government and its policies, the swift action exemplifies proper decision making. The decision taken is purely on moral grounds and have been free-flowing by instincts till equilibrium has been reached in terms of sufficiency of support. In this case though what amount of assistance will be enough is difficult to quantify given the fact that over one million people took shelter in relief camps. People indeed did make rational choices. The other scenario is the tension between environmentalists and stakeholders. The government certainly did not pay much heed to the warnings given from time to time as it was busy with its growth led development structures. The trade-off principle by Gregory Mankiw surely is timeless. Also, the rejuvenation of the sunken economy will have its own microeconomic and macroeconomic implications on the opportunity costs. Given the facts, the way Kerala dealt with the mishap is commendable. All eyes are now on the economy’s revival whose strings are in the hands of the state and its people. It is projected by the Kerala government that GDP growth would be 1. 3 per cent higher than the previous year at 12. 6 per cent in 2018-2019. But higher inflation and negative growth of the agricultural sector would be inevitable.
Overall hamper to the economy would be due to the time lag for the revival to take place. But there’s more for the economy, at the individual, state and national level to contemplate. Clubbed together, they can be called P. C. S Financing, where, P stands for Personal, C for Climate and S for Sustainable. With a lot of things like Personal Finance, Climate Finance and Sustainable Finance coming up of late and being utmost relevant in the Indian context, clear definitions are needed to be established. Personal Finance plays an important role in not only achieving personal economic goals, it’s a rudimentary necessity when comes to absorbing the financial shock, both in daily life as well as broader level like natural disasters. But the question remains, are Indians fully aware of their expenses, let alone management? Awareness campaigns and workshops should be targetted to the youth, in colleges and offices which will help to reach out to the mass and make Indian economy one where single economic units are capable of combatting unfortunate events, at least to some extent.
India has its Climate Financing model on a large scale with a lot of complications which awaits simplification to make planning, management, and implementation at the earliest possible. The scope of Sustainable Financing has high potential in India since it engages business decisions to integrate social, environmental and governance. Market along with banking and investment innovations should occur simultaneously to make Indian financial system sustainable. Not only States, but the national economy should recognize sustainable and climate financing as the heart of policies which roles out in future. We have come to a juncture where sustainability is the key, be it environmental or financial. So, the government has to explicate these terms, policies and much more. Till then, let’s have an optimistic approach which is suggestive by the rational and compassionate behaviour of mankind towards the flood throughout. Meanwhile, are you setting aside some amount of your income for an exceptionally unfortunate disaster (natural or otherwise)?
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