New Delhi, May 11 Prime Minister Narendra Modi’s appeal for a one-year economic adjustment framework makes sense, which is aimed at managing short-term stress and likely recover over the next nine months, a top banker said on Monday.
In an interview with IANS, Dr Dharmesh Bhatia, Director–Wealth Management at Dubai-based Emirates Investment Bank, said such temporary disruptions are part of normal economic cycles, and can be offset in the broader recovery phase if policy and macro conditions remain supportive.
"Three months of stress can be fully recovered over time," he said.
On PM Modi’s appeal for a one-year economic adjustment framework, Bhatia said the timeframe is consistent with how production and macroeconomic cycles are typically assessed.
He added that production cycles are generally measured on an annual basis, where short-term shocks are absorbed and recovered over a longer horizon.
Explaining further, he said the first three months of economic stress can have a wider impact on subsequent quarters, but recovery is possible within a structured cycle.
"The first three months is a stress period. This can impact the next six to nine months, but if corrective action is taken over that period, the initial loss can be fully recovered," he told IANS.
Bhatia said the one-year framework reflects a practical "number-crunching approach" where short-term disruptions are balanced against medium-term recovery potential.
On PM Modi’s appeal to reduce non-essential gold purchases and encourage work-from-home practices, Bhatia said the focus is on managing import dependence and protecting foreign exchange reserves.
He noted that India’s trade deficit is driven largely by imports of crude oil, gold and electronics, making external vulnerability a key policy concern.
"The government is trying to ensure the economy does not come under additional stress. This is essentially an appeal to reduce imports and manage consumption," he said.
He added that while gold imports can be reduced, energy dependence remains the most critical factor for India’s economy.
“We can survive without gold, but we cannot survive without oil. Higher oil prices create a double impact through increased import bills and dollar outflows,” Bhatia said.
Bhatia said the objective of such measures is to moderate consumption pressures in the short term so that macroeconomic stability is maintained and recovery is stronger over the medium term.
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