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Prime Minister Narendra Modi’s appeal for a one-year economic adjustment framework is the right and practical step. The move is to handle short-term economic pressure, and a possible recovery in the economy over the next nine months. Dr. Dharmesh Bhatia, Wealth Management Director of Dubai-based Emirates Investment Bank, said this in an interview given to news agency IANS on Monday.

Speaking to IANS, Dr Bhatia said that such temporary economic challenges are part of the normal economic cycle, and their impact can be mitigated later if policies and economic conditions remain favourable.

“Three months of economic pressure can be fully recovered with time,” he said. On Prime Minister Modi’s appeal for one year economic adjustment, Dr. Bhatia said that this time frame fits perfectly in terms of production and macroeconomic cycle.

He explained that the production cycle is usually measured on an annual basis, where short-term shocks are managed in the long run.

He further said that the economic pressure of the initial three months may affect the next few months, but it is possible to compensate for it by taking the right steps.

Dr. Bhatia said, “The first three months are a period of stress. Its effect can last for the next six to nine months, but if corrective steps are taken during this period, the initial loss can be completely compensated.”

On Prime Minister Modi’s appeal to reduce the purchase of non-essential gold and promote work from home, Dr. Bhatia said that its main objective is to reduce dependence on imports and to protect foreign exchange reserves.

He said that India’s trade deficit increases mainly due to import of crude oil, gold and electronics, hence it is a matter of great concern for the government.

“The government wants to ensure that there is no additional pressure on the economy. This is basically an appeal to reduce imports and control consumption,” he told IANS.

Dr. Bhatia said that gold imports can be reduced, but energy dependence is the most important issue for India’s economy.

He said, “We can live without gold, but not without oil. Rising oil prices have a double effect. The import bill increases and the inflow of dollars also increases.”

He said that the purpose of such steps is to control consumption pressure in the short term, so that economic stability is maintained and the economy emerges stronger in the medium term.