Indian economy and the pandemic.
Last year India faced one of the toughest lockdowns in the world in order to curb the spread of the Covid-19 virus. Even though the lockdown was suggested as the best option by the WHO and other health experts then, they didn’t provide any guidelines on the strictness of the lockdown. The Indian government’s move to impose one of the toughest lockdowns in India was initially hailed by the local masses due to lack of understanding of the economical impacts of the lockdown. The government as well as the opposition were in favor of imposing a lockdown, ignoring the side effects of the lockdown.
The way the Indian government portrayed the lockdown as it will prevent the Covid-19 outbreak in the country shows the little understanding of those sitting on the high ranks. Lockdowns were never meant to curb the virus spread , the very aim of the lockdown was to buy extra time so that proper arrangements can be made , number of beds and ventilators in the hospitals can be increased, proper supply of PPE kits and N-95 masks for the frontline workers can be insured etc.
Due to execution of the harsh lockdown the economy took a deep impact as most of the industrial production was stopped. The private corporations started downsizing in order to decrease the expenditure on the salary of employees. The backbone of the Indian economy services sector was among the hardest hit sectors. From restaurants to hotels, schools to coaching institutes all mass employment sectors remained closed for over a year sparing a few months leaving millions of people either underpaid or unemployed. The effect of lockdown on the economy can also be seen in the GDP contraction in the Financial year(FY) 2020-21 which is about -7.3% historic low for any FY from the independence. The negative growth rate has made the dream of a $5 trillion economy by 2024-25 more distant than earlier thought. The negative growth has dire consequences on the living standards of millions of Indian families standing on the line of poverty defined by the government itself. Just in 2020 the number of people living below the poverty line doubled in India. The powerhouse of the Indian economy middle-class also shrank by 3.2 crores in numbers -- to 6.6 crores from the pre-pandemic level of 9.9 crores.
The Indian economy was the worst hit economy among all the emerging economies. However when the first wave came in control people expected to see a V-shaped recovery. The initial hope was supported by the growth rate predictions from the global firms like the moody’s which projected the Indian economy to grow by 12% in 2021, back in March 2021. However people knew little then that the government would prioritize the elections over the nation. The premature victory announced by the central government in the battle against Covid-19 was against the historical facts of a once in a century pandemic. Every pandemic in human history consisted of two or more waves in which the deadliest wave was the 2nd wave in all of the pandemics. The misplaced priorities and the sheer ignorance led India into a much deadlier and volatile situation in comparison to the first wave which exposed the decades of under investment in medical infrastructure and social welfare. The second wave caught the government unguarded and unprepared. The second wave will definitely slow down the expected V-shaped recovery but still it doesn’t mean there is no way out.
If the central government wants to come out of the prevailing situation it will have to focus on faster vaccination of the citizens. Vaccinating 70% or more of the total population means a ticket to open the economy to the pre-pandemic levels. Vaccination followed by robust and inclusive economic policy can insure the development of the nation and improvement of life standards of it’s people.
