Quarterly Review of the Economy, 2020:1Q in Coronavirus times

The Coronavirus pandemic has wrapped practically every person living in India in an unheard-of health, humanitarian and economic crisis. The pandemic came late to India. The Indian government responded with a tough lockdown starting March 25.  The lockdown has flattened the Coronavirus curve and pushed out its peak. But it has hit poorer Indians and migrants hard as Indian cities began haemorrhaging jobs and workers. The images of migrants walking home hundreds of kilometres has revealed the fault lines in the economy and society.

Coming on top of India’s economic slowdown since 2016-17, the lockdowns have triggered the worst economic downturn in India’s history. The Indian Government announced a Rs 1.7 lakh crore ($22.5 billion) recovery package on March 27, when India had some 600 confirmed cases.  Many found this woefully inadequate, expecting the economy to actually shrink. Some 46 days and 74,700 confirmed cases later, the Government on May 12 announced a package of Rs 20 lakh crores ($264 billion, about 10 percent of GDP), including earlier recovery measures from the Centre and RBI.

On May 15, NCAER presented its Quarterly Review of the Economy for the first quarter of 2020 to assess the economy-wide impact of India’s biggest economic shock and what the future might hold.  The principal authors, NCAER Distinguished Fellow Sudipto Mundle, Senior Fellow Bornali Bhandari, and NIPFP Professor N R Bhanumurthy, provided an early analysis of how the just announced recovery package could help steer the economy to recovery and to positive but modest growth.  QRE guest Usha Thorat, former RBI Deputy Governor, offered her comments on financing the fiscal deficit. The speakers discussed macroeconomic policy and growth scenarios that may result from policy choices made by the government to steer India out of the current crisis.  The discussion was moderated by NCAER Director General, Shekhar Shah and was attended by over 125 participants.

The Review and presentation is available on this webpage.