While social distancing and lockdowns are a must in tackling the Coronavirus outbreak, we also have to slowly allow trade, exchange and markets to function to prevent a sharp currency depreciation and a breakdown in food and essential supplies, said Kaushik Basu, Professor of Economics at the Cornell University, US, and former Chief Economic Adviser to Government of India.

Basu took to micro-blogging platform Twitter on Monday to detail the three steps for gradual opening of the economy.

Testing should be expanded vastly, he said, as this will get the economy moving. Planes will have to now leave alternate seats empty and passengers have to come two hours early and have their medical check-up done, said Basu.

Direct support is essential at least in the short term, he said. “Along with cash supplements, the poor will need direct support with food, healthcare and basic needs. If shortages appear, prices will rise and the poor, even with cash handouts, will get outcompeted,” he explained.

Basu said that financial support has to be given to small businesses to encourage them to not layoff their workers. “This will no doubt expand the fiscal deficit, but that is a short-run cost we have to take. We can begin to correct the deficit next year,” he said.

Basu also added that doing health check-ups for all passengers before a flight is not absurd. “A few decades ago, if you (had) said all passengers would have to do security checks, many would have said that is absurd. If the state gives incentives to a few big pharma and airline companies, it can be done,” he pointed out.

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