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.
NCAER hosted Sonalde Desai and Santanu Pramanik from its National Data Innovation Centre to share the early results of Round 2 of its rapid response Delhi NCR Coronavirus Telephone Survey (DCVTS-2) launched on April 23, 2020, and completed on April 26. The discussion was moderated by NCAER Director General, Shekhar Shah. The Round 2 DCVTS builds on DCVTS-1, which was fielded during April 3 to 6, 2020. The DCVTS-1 results were released on April 12, 2020.
Policymakers at the Centre and in the States are grappling with many questions in making difficult decisions between continuing to suppress the virus and restarting economic life. There are dangers on both sides: open too soon and a second-round pandemic could be more costly, open too late and rebuilding the economy will be more costly. After more than a month into India’s lockdown, how are Indian households coping? How is their perception of the risk of infection changing as economic and social hardships deepen for many with every passing lockdown day? How has social distancing changed, if at all? What activities will households resume, or not resume, once the lockdown is lifted? What has been the financial, domestic, and logistical impact of the lockdown and of heightened health fears on households? How differently have farmers, businesses, salaried workers, and daily-wage workers felt these impacts? What has been the experience of households receiving relief from government? How has support for the lockdown changed since early April? Round 2 of the DCVTS answers some of these questions.
Round 2 of the DCVTS interviewed a representative random sample of some 1,885 adults in Delhi NCR comprising 31 rural and urban districts in Delhi, Rajasthan, Uttar Pradesh, and Haryana. The DCVTS will be repeated roughly every three weeks with questions chosen to reflect key issues that seem important for this fast moving pandemic. The webinar was attended by over 110 participants.
NCAER DCVTS Round 2 results and the Press Release is available on this webpage.
As we approach May 3rd and the end of the second lockdown in India, and as the reported Covid-19 case-load and the number of daily new cases appear to be declining, attention is increasingly turning to the need for rapid action on the economy to protect livelihoods and enterprises, including the most vulnerable MSMEs that provide employment for the majority of India’s labour force. The Government announced a relief package for the poor of Rs 1.7 lakh crore on March 27, but much more has been eagerly awaited over the past month. Policymakers have the unenviable but critical task of making difficult choices on how much and where they are willing to spend. India’s fiscal situation was not great to start with, but is now under even more pressure with sharply declining revenues and with estimates of the additional pandemic-related expenditures as high as 5 percent of GDP or Rs 10 lakh crore, according to Arvind Subramanian and Devesh Kapur when they spoke at a recent NCAER webinar. Developments in financial markets in the past few days add further concern. With each passing day, the cost of an eventual recovery and the revival of large and small businesses is likely to rise, while urgent action and funding are needed to protect the most vulnerable whose livelihoods and lives have been deeply impacted by the Coronavirus and the lockdown.
On April 30, NCAER hosted the next in its Coronavirus Briefings webinar series to discuss how to protect and rebuild the Indian economy out of the deepest recession it will have fallen into in its history. The second in this series dealing with the Indian macro economy, the webinar was moderated by Shekhar Shah and featured four leading financial sector India Chief Economists—Neelkanth Mishra, Pranjul Bhandari, Samiran Chakraborty, and Devendra K Pant. The panelists also responded to write-in questions from webinar participants. The discussion was attended by over 100 participants
The Great Lockdown has taken the global economy to the brink of its deepest recession since World War II. As India copes with its own, largest lockdown in human history, the cost to our economy continues to mount even as the Coronavirus curve is surely being flattened and its peak pushed out. With each passing day, the cost of an eventual recovery and the revival of businesses is rising, while urgent action and funding are needed to protect the most vulnerable whose livelihoods and lives have been deeply impacted. The choice of an exit strategy in the face of much epidemiological uncertainty will be critical to sustained success in curbing the virus and promoting a strong economic recovery.
How deep and broad will the hit to activity be around the world and in India? Can the recovery be as strong on the other side of the pandemic? Is the policy response around the world sufficient? What are the implications for India? What will this do to our economy, industry, banking sector and households? How should we think about the policy response? What should we be doing on the economy during the second lockdown to prepare us for a safe, sensible and clear exit strategy that will allow us to rebuild rapidly? Is there a silver lining to the cloud?
To discuss these questions, NCAER brought together four leading industry India Chief Economists in its NCAER Coronavirus Briefings webinar series—Sajjid Chinoy at J.P. Morgan, Sonal Varma at Nomura Holdings, Santanu Sengupta at Reliance Industries, and Abheek Barua at HDFC. The remarks and insights of these market-focused experts were followed by a discussion moderated by NCAER Director General Shekhar Shah during which the panelists also responded to write-in questions from webinar participants. The discussion was attended by over 120 participants.
In the third of its webinar series on the Coronavirus, NCAER hosted Arvind Subramanian, and Devesh Kapur to talk about their ideas on how to pay for the massive increases in public expenditure needed to shield the Indian economy and the millions of workers who have lost their jobs and incomes due to the Coronavirus pandemic. Subramanian is a former Chief Economic Adviser to the Government of India, Nonresident Senior Fellow at Petersen Institute for International Economics, and currently at the Harvard Kennedy School. Kapur is the Starr Foundation South Asia Studies Professor and Asia Programs Director at the School of Advanced International Studies, Johns Hopkins University. The discussion attended by over 160 participants was moderated by NCAER Director General Shekhar Shah.
As India enters the first day of the second Coronavirus lockdown, on present plans it will be an unheard of 40 days by the time this lockdown ends. India’s bold action on March 25 was necessary to avert a health disaster, but must be matched by even bolder economic measures by the Centre and States to protect the poor with little access to food and incomes and to buffer businesses facing financial collapse. Do the Union and State governments have the fiscal means to fight the Coronavirus on both the health and economic fronts? What are the bold but viable funding options we should be looking at? How can imaginative, rapidly put-together, bipartisan cooperative federalism between the Centre and the States help? Can government policies, funding, and programmes be a bridge between meeting pressing, urgent needs and reconstructing the Indian economy onto a more resilient, healthier, and faster development path?
In this very engaging NCAER webinar discussion, Kapur and Subramanian pursued answers to these pressing questions and then joined a Q&A session with the participants. Both Kapur and Subramanian are part of the Research Panel for NCAER’s India Policy Forum and frequent contributors to this apex annual policy conference held in the summer in New Delhi.
