Time for economic recovery to begin

The biggest concern for the Centre on whether the lockdown should be extended is the lives versus livelihood debate.

 |  5-minute read |   04-05-2020
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The nationwide lockdown has been extended again to contain the spread of coronavirus and break the transmission chain, thus making India the only country in the world to impose such a long lockdown covering the entire country. Now the total tenure of the nationwide lockdown, scheduled to end on May 17, is 54 days. And one can't rule out the possibility of yet another extension. Even China enforced a complete lockdown only in Wuhan, its fourth largest city from where the coronavirus outbreak started. In contrast, the lockdown in India, in force since March 25, covers the entire length and breadth of the country.

Lockdown 3.0

One thing that stood out in the latest extension of the lockdown by 14 days is that this time it was not Prime Minister Narendra Modi who announced the extension. It was left to the Union Home Ministry which announced the extension by way of a press note along with the list of red, orange and green zones. While the continuing battle against coronavirus shows no signs of ending any time soon and total number of confirmed cases as well as deaths continue to spike, the lockdown has definitely helped in containment of the virus. The enormity of the task ahead can be gauged by the fact that three months after the novel coronavirus reached India (the first Covid19 case in India was reported on January 30, a Kerala student who was studying in Wuhan, China), the total number of cases in India has surpassed 32,000 and the number of total deaths so far has reached the four-figure mark. The biggest concern for the Centre on whether the lockdown should be extended is the lives versus livelihood debate.

The question of lifting the lockdown completely was not even worth a consideration as it would have amounted to frittering away the advantages of the 40-day nationwide lockdown. Adopting the traffic colour coding of Red, Orange and Green for a staggered easing of the curbs formed the core and kernel of the government's exit strategy. The curbs have been partially eased in the orange zones and largely lifted in the green zone though curbs on all forms of public transport - road, rail and air - as well as interstate movement continue to be in place. Extending the nationwide lockdown by two weeks more was an easy solution as a large number of states favoured further extension of the lockdown, but it comes with a concomitant problem of hurting the economy. After all, what is the guarantee that even after Lockdown 3.0, the pandemic would loosen its grip? The current hard reality is that even after 40 days of the lockdown, the spread has continued. Many core sectors of the economy - including aviation, manufacturing, automobiles, infrastructure, construction, real estate - have been very badly hit. Moody's has already cut its projections on India's growth rate from 2.5% to 0.5% and further extension of the lockdown may push it into negative.

The easier option

Before announcing the second extension of the lockdown till May 3, PM Modi in his video-conferencing with the chief ministers had indicated his favoured approach of "Jaan bhi, jahaan bhi" (lives as well as livelihood). This remark was widely construed to mean that the PM was mindful of the need to kickstart the economy and he would go for a partial lifting of the lockdown. However, that did not happen and hours before the 21-day lockdown was to get over, he announced a further extension of the lockdown by another 19 days. The government has chosen to play safe and now extended it further by two weeks more. It evokes feelings of deja vu.

A similar situation may develop once again when Lockdown 3.0 comes to an end on May 17. The PM has had yet another meeting with the chief ministers, his fourth. At this meeting he made an extremely significant remark which did not get the attention it deserved. He asked the chief ministers to woo the MNCs relocating production out of China. It must be mentioned here that one important component of Japan's almost one trillion dollars package to fight the coronavirus pandemic is a $2.2 billion fund only to facilitate Japanese companies in China to relocate back home and elsewhere. The annual turnover of Japanese companies in China runs into billions of dollars. India can be fertile ground for these companies but for that to happen the lockdown has to end first.

Global precedent

Should the Centre consider a further extension of the lockdown, it won't come without huge economic costs. Even the hardest hit countries in terms of the total number of confirmed coronavirus cases and deaths have announced their plans to exit their respective lockdowns. France and Spain have already announced plans to ease their lockdowns to avert an economic collapse and start partial easing of curbs from May 11 in which public transport will be largely restored.

Even in the United States, the biggest victim of coronavirus with over 60,000 deaths, President Donald Trump had remarked a few days ago: "A nationwide closure cannot be a long-term solution... the country needs a functional economy." Obviously PM Modi wouldn't be oblivious to how the major world powers are dealing with their respective lockdowns when he reveals what he plans to do when the twice extended lockdown ends on May 17. It's time for the story of revival of the national economy to begin. Or else the five trillion dollar economy may just stay a pipe dream.

(Courtesy of Mail Today)

Also read: DailyOh! Trains finally taking migrants back home. Lockdown to stay till May 16

Writer

Rajeev Sharma Rajeev Sharma @kishkindha

The writer is an independent journalist and a strategic analyst.

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