Lives and Livelihood

How do we tackle the marauding COVID-19 virus which has not only spread to every part of the globe but has also claimed millions of lives? The only way humanity seems to be able to fight back is to shut down everything, stop all kinds of activities, and recede to our homes. In India, travel restrictions and closures of schools, cinema halls, etc, started in February 2020 in some parts of the country. Beginning from 24 March, the country saw one of the severest lockdowns in the world being imposed on 1.3 billion people. As we know that counterfactuals are notoriously difficult to estimate, so we will probably never know how many, but there is no doubt that this lockdown decision has saved many lives.

Needless to say, countless number of people have been suffering income loss and are facing economic hardships during the period of lockdown. While the economic impact of COVID-19 is brutal across all affected countries in the world, for India it can have a much more serious repercussion. India is a developing country with a long way to go before it becomes a developed economy. India’s gross domestic product (GDP) has been growing at a reasonable rate, but clearly has to maintain a faster growth rate to ensure a chance to make it to the league of developed countries. This gets more complicated because of the demographic structure—a large percentage of India’s population is young right now as India is moving through demographic transition. So, the longer this complete lockdown lasts, more the damage it will cause to the economy and livelihoods of people. The short-run implications are possibly more troublesome at the moment. This episode can push a large number of people into poverty; malnutrition can increase; and people may even face life-threatening hunger. Some observers have brought up the spectre of a famine to describe the impending economic hardships. Thus, while we cannot take drastic steps for resumption of economic activities that can cause numerous deaths, we need to open up the economy as much as possible and as soon as possible. It is impossible to continue the shutdown until a vaccine is developed, which can be 12 to 18 months away.