Lift lockdown to save economy, with localised efforts to contain Covid

| Updated on May 12, 2020 Published on May 12, 2020

States should adopt the best practices of those with low fatality rates, undertake widespread testing and make transparent daily disclosures on infection and fatality rates

Fifty days into India’s lockdown, the Centre and States appear to be equally at sea on the best way forward. Consensus proved elusive in the latest round of talks on Monday, when some States demanded an extension beyond May 17 while others urged expedient re-opening. No doubt it’s a hard choice between re-opening the economy and risking a more virulent Covid spread or remaining shut — prolonging the pain for the poor. But a dispassionate assessment of evidence suggests that lifting the lockdown is the more rational choice today, with States being allowed, and adequately funded, to frame decentralised local responses for identified hotspots.

Incoming data is making it abundantly clear that the bar on all non-essential activity is extracting a price on the economy that it can scarcely afford to pay. The reading of 5.4 on the IHS Markit Services PMI and 27.4 on the Manufacturing PMI, suggest that these two critical engines likely contracted by over 90 per cent and 45 per cent respectively in April with the complete lockdown in place. Fuel offtake also fell by 46 per cent, indicating a body blow to the transport and logistics sector. The 80 per cent drop in GST collections for some States, and the 23.5 per cent unemployment rate estimated by the CMIE for April point to the debilitating damage that the lockdown is inflicting on livelihoods and the fisc. Moody’s has already trimmed India’s GDP growth forecast to zero for FY21, while Nomura predicts the economy may contract 5 per cent. Such a manufactured crisis for the economy may be deemed to be worth it, if the lockdown had succeeded in diminishing the Covid-19 threat by helping States prepare for an explosion in cases by beefing up their hospital capacity. But reports of cancer patients being shunted out of hospitals, States scrambling for testing kits and hospital staff being asked to reuse PPE suggest that this hasn’t been the case. While States such as Tamil Nadu or Kerala with robust public health infrastructure have scrounged up capacity, others like Maharashtra are still battling severe constraints.

Despite its population density, India has so far reported just 1.7 per cent of the global Covid-19 infections and 0.8 per cent of the fatalities while being home 18 per cent of the world population. Yes, a few cities are beginning to show a hockey-stick like escalation lately, but the infection clusters appear concentrated. The large number of asymptomatic patients and a fatality rate that is less than half the world average (3.2 per cent) offer hope that, armed with more information, targeted testing and stringent containment strategies through localised effort, can help India contain the Covid spread better than its developed world counterparts. States, instead of working at cross-purposes, should look to adopt the best practices of those with low fatality rates, bite the bullet on widespread testing and make transparent daily disclosures on the infection and fatality rates, so that citizens are inclined to self-regulate behaviour rather than have a nanny state monitoring them.

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Published on May 12, 2020
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