Editorial: Six months, and counting

The lockdown, which was punctuated by circuit-breaker relaxations, had placed a severe strain not just on human resources in general, but on various sections of the economy, leading to mass unemployment, loss of livelihood, and health. This situation is unprecedented as the idea of shutting down a country for six consecutive months is not something that either the government or policymakers or economists might have planned for. While thousands of white-collar workers were sequestered in the comfort of their homes, connected via VPNs, millions of jobless migrant workers and daily wage earners were forced onto the streets, to undertake hundred-mile journeys back to their homes, to a life of uncertainty.

The Ministry of Statistics and Programme Implementation had recently released its data which said the Indian economy had contracted by 23.9 per cent in the first quarter of this fiscal, its worst performance since 1996. For the private consumption and investment-driven economy that India is, both these metrics tumbled in the wake of the pandemic. For the period mentioned, private consumption, which makes up 59 per cent of India’s GDP, dipped by 27 per cent. Similarly, investment carried out by private businesses fell by 47 per cent. Some of the biggest sectors on the income-generating front - manufacturing, retail, real estate, construction, and transport took a beating during this quarter.

Apart from the wealth generators, the youth of the nation, comprising students of schools and colleges have been yet another casualty of the crisis. With half the academic year being spent confined to homes, reliant on e-learning tools, devoid of personalised attention, tuitions or even counselling sessions, students have had a rough year, to put it mildly. There might be a silver lining on the horizon as recent reports have suggested that Sept 23 was the sixth consecutive day when the number of those recovering from COVID-19 exceeded the number of new infections detected. This phenomenon has not occurred for more than a day since the pandemic began. On September 17, the active cases were 10.17 lakh and over a week, that number had come to 9.7 lakh. Interestingly, the reproduction number or R-value, which is an important metric of how many people get infected by one individual, had also fallen below 1 for the first time since the pandemic was reported in the country. An R-value under 1 means that those getting infected are fewer than those carrying the virus. As it stands, the country has blazed past 6.5 mn cases on Sunday while recoveries stood at 55.21 lakh and the deceased at over 1 lakh.

Experts believe that even amid the possibilities of a vaccine hitting our shores by early next year, the country will have to brace itself for a muted economic milieu for the remaining two quarters of the fiscal, and the year thereafter, considering the damage that has already been done. However, it is imperative that the government at this point sets aside all non-essential investments and allocations and single-mindedly focusses on beefing up the public healthcare infrastructure (over and above the two per cent expenditure as part of the GDP) and its contingency response framework.

There is also a need to handhold the informal economy and MSMEs through this crisis as they have been among the hardest hit. The collective wisdom gained by all the states in the first six months of the pandemic must be employed fruitfully by the Centre as guidelines in helping India get back on its feet over the next half year.