MUMBAI – Indians are calling for an end to a countrywide lockdown as concerns rise that job loss and hunger may soon hurt citizens more than the Covid-19 virus it was designed to contain.
Raghuram Rajan, former governor of the Reserve Bank of India, and N R Narayana Murthy, the founder of Infosys Technologies, said restrictions on economic activities should be relaxed so that the vast majority of people can get back to work and start earning again. Their appeals follow those of other industry leaders and bankers.
“The level of unemployment, the numbers are worrisome … mind boggling,’’ said Rajan in an interaction with Rahul Gandhi, former president of the main opposition Congress party. “We need to open up in a measured way and as fast as possible. We don’t have the capacity to support people across the spectrum for too long time as we are a relatively poor country.”
The Center for Monitoring India Economy, a think-tank, estimates that 100 million more people will lose their jobs after the lockdown. The CMIE estimated that unemployment hit 23% in a separate April 7 report.
Even before the virus hit, Indian unemployment was at its highest level in four decades, a reflection of faltering gross domestic product (GDP) growth. India’s biggest rating agency, Crisil, forecasts average corporate revenue could drop 10%, driving GDP down further by 4 percentage points in fiscal 2021.
Behind those numbers, India could see more deaths due to hunger than from the pandemic if the lockdown continues, Infosys founder Murthy said at a webinar on Wednesday. The country must accept living with the coronavirus as the new normal and facilitate the return-to-work of able-bodied while protecting the most vulnerable, he said.
An estimated 190 million Indians are either self-employed or work in the informal sector. A significant part of this population is likely to have lost its livelihood due to the lockdown. More will lose their livelihoods “if this continues for long,” said Murthy.
An estimated 80% of India’s population earns less than US$5 a day, most of which typically is spent on food and shelter. Few have significant, if any, savings – a harsh economic reality the pandemic has inexorably accentuated.
India imposed a Covid-19 countrywide lockdown from March 24, though the results of the containment strategy have been mixed.
While health experts point to a sustained rise in the number of cases, the overall number is much smaller compared with hard-hit Italy or Spain, countries with much smaller populations than India’s 1.3 billion.
As of April 30, India had 32,534 total Covid-19 cases, with 8,372 cured and 1,075 deaths. Those numbers, proponents of the lockdown say, compare favorably with the 1.1 million cases and 62,300 deaths recorded in the United States.
Health experts say it now takes 11 days to double the number of virus cases in India, compared with 3.4 days before the lockdown.
With a low median age of 28 years, India is well placed to try a “herd immunity” strategy to increase immunity and withstand any infection. The virus has proved more virulent among the elderly.
Still, the fear of losing lives has prompted some Indian states to extend the lockdown for all economic activities except agriculture. Yet the concern of an economic collapse is rising.
Such concerns are not limited to emerging economies such as India. The International Labor Organization (ILO) has cautioned that up to 1.5 billion people, or half of the global workforce, could become unemployed because of the Covid-19 pandemic.
Bankers and businessmen say they have had virtually no business or sales in the first month of the financial year and are convinced economic revival may take 18 to 24 months. Opening only parts of the economy, they say, may not be enough.
Some have suggested that India should open economic activity in areas designated as “green zones” that have recorded zero Covid-19 case for the past 28 days, and “orange zones,” with no cases in the past two weeks.
However, analysts note that the majority of economic activity in the country is carried out in more densely populated and widely infected “red zones.”