Economic Cost Of Lockdown: The Pain, The Loss And The Way Out

As India is still counting the cost of the lockdown, things are unlikely to go back to normal even after its removal

- Pratul Sharma

Social distancing is the new world order. As of now, it is the only effective intervention against the COVID-19 pandemic. Its more stringent version, lockdown, however, comes with severe side effects like loss of jobs and decelerated economic growth. But the Narendra Modi government has made its approach clear and taken the tough path, as it extended the all-India lockdown from April 14 to May 3.

Even in its initial response, the government had rightly put lives ahead of the economy. The first phase of the lockdown slowed the spread of virus, buying time for the local authorities to ramp up medical infrastructure, set up isolation facilities and ensure supply of medical equipment. It is likely to continue in some hotspot districts even after May 3.

It comes, however, at a debilitating cost to the economy, impacting livelihoods, social security, and jobs. “If it is extended to end May, the additional cost will be 9 per cent of the GDP,” said Arvind Virmani, former chief economic adviser to the government. Economists say the current crisis is far worse than the one in 2008-09. The 2008 slowdown had its origin in one country and it created ripples across the world. But COVID-19 is leaving behind destruction simultaneously across the globe. All economies are in recession, and there might not be a solution in the near term.