How Can India Contain The Economic Impact Of COVID-19?

The government must focus on health and livelihood issues at the same time

The COVID-19 pandemic has effectively brought normal life to a halt in India. The importance of social distancing and a lockdown in curbing the spread of the virus cannot be stressed enough, but these measures also have huge repercussions on livelihoods and the economy at large, which has already been seeing a slowdown over the past year. In a conversation moderated by Vikas Dhoot, Naushad Forbes and M. Govinda Rao talk of ways in which India can tackle this humanitarian and economic crisis. Edited excerpts:

Do you see a parallel in recent history to the situation we face globally due to the novel coronavirus?

Govinda Rao: This is the mother of all challenges in recent memory. The International Monetary Fund (IMF) says that the 2008 financial crisis comes close, but I think this is much bigger than that. Possibly, one has to go to the times of the Great Depression. Even qualitatively, it’s a very different challenge, because first you have to save lives, then you have to save livelihoods, then you have to meet with other costs like loss of jobs and production, and supply chain disruptions. It’s not just confined to one sector or country; it encompasses the entire economy and the world. So, I think there is no immediate policy instrument that you can put in place because you don’t even know how long the problem will last. The depth of the problem that you are going to face is dependent on the length of the period for which you are going to close down and the extent to which the virus spreads.