India recently, officially, crossed the one-million mark of confirmed COVID-19 cases. The curve hasn’t flattened, as some pundits predicted, and there is still a long way to go before Indians can roam around freely without a mask.
The nationwide lockdown declared on March 24, 2020, made sense for a while, as the country was, physically speaking, not prepared in terms of its health infrastructure, to handle a crisis of that magnitude.
The government, however, learnt quickly enough that central planning does not work in the case of a nation-wide pandemic. Businesses, hard-hit by the lockdown, breathed a sigh of relief when Unlock 1.0 was announced, but there was little clarity on what lay ahead.
Now it is known. The Centre’s decision to re-open the economy and allow states discretion to enforce local lockdowns has led to unintended consequences. State governments are now re-imposing local lockdowns at will. The idea behind these arbitrary actions is the local government’s inability – and morbid fear – to handle a surge in cases. They are, at best, poor attempts to keep the numbers down desperately – even at the cost of endangering public health.
In doing so, state governments are actively choosing to control the virus, as opposed to reviving their economy. But a lockdown in one state or city not only affects the economy of that state but possibly other, neighbouring states as well. Let’s see how.
Supply chains are not geographically isolated. For instance, a company manufacturing a fridge in Delhi is probably sourcing the materials from a number of other states. So, while Delhi is not under lockdown, a closed Rajasthan ensures that the passage of the materials is stymied, and the product does not reach its intended destination.
Supply chains can be much more complicated than this one simplistic example, but that’s precisely why local lockdowns are pinching businesses so much.
Experts concur. Dharmakirti Joshi, Chief Economist at CRISIL, brought it out well in his article in the Indian Express: ‘’The partial unlocking of the economy and the back and forth on containment measures will continue to pose a hindrance to supply chains, transportation and logistics.”
Vimal Kedia, a core supplier to Coca-Cola, Procter & Gamble and Nestle, told the Economic Times in an interview: “Intermittent closure and reopening of states is disturbing the entire cycle of business. It takes a lot of time to streamline processes back to capacity. The disruptions in one state have a trigger effect on the other markets as well, since there is interdependency in terms of labour and other supplies.”
It is clear that no state or city can be in a state of total lockdown, which is why a city like Kolkata and a vast state like UP are innovating, opting for a new concept called a `weekend lockdown’. However, it’s difficult to quantify how beneficial these measures are in containing the spread of the virus.
Nevertheless, shutting down cities may not be the solution, difficult as the situation is. Delhi, for instance, did not follow an on and off lockdown phase-out policy. A combination of increased testing and a significant expansion in the state’s medical capacity has helped to reduce the number of active Coronavirus cases with a recovery rate of well over 80%, without putting people’s livelihoods at risk.
The graph above shows Delhi’s progress over the last three months, in comparison to other metro cities. This progress is due to increased testing and massive expansion in healthcare infrastructure. There’s a smart lesson to be learnt from Delhi – states needn’t necessarily make a choice between controlling the virus and reviving the economy.
India’s Coronavirus curve, however, continues to rise. But more important than the graph above is the one given below.
Although the overall unemployment rate in India is back to pre-Corona levels, urban unemployment continues to be high. At this stage, it is difficult to choose between containing the virus and protecting livelihoods. Both need to happen simultaneously, and the experience of Delhi shows us that it is possible.
However, Delhi can’t act alone. The impact on a state’s economy is immense. All states need to come together and make an active effort to realistically handle this crisis rather than trying to create a facade of “good COVID-19 management”.
Lives and livelihoods are two critical imperatives to India’s Covid management strategy. It’s not an easy task to prioritise both, given India’s economic and infrastructural constraints, but that makes it even more crucial for the Centre and the states to work together to ensure that all sections of our population come out unscathed from the pandemic.