MUMBAI – Despite having a high number of new coronavirus infections, India plans to slowly reopen in a bid to get its heavily hit economy back on track, as the number of daily infections rose to a record 8,782.
India is now the seventh most affected country by the pandemic, with 190,962 cases, 5,411 deaths and 91,866 recoveries. It stands precariously behind the United States, Brazil, Russia, Spain, the UK and Italy.
Various Indian states have reported surges in the number of daily cases. Maharashtra added 2,940 cases for a total of 67,655 and 2,286 deaths. Its capital Mumbai and suburbs, with 47,565, accounted for 73% of the state’s cases.
As the country battles the pandemic, data showed the economy was slowing even before the lockdown. Gross domestic product (GDP) grew by a meager 3.1% in the January-March quarter, from 4.1% in the quarter ended December 31, the government said on May 30.
Full-year growth slowed to 4.2% from 6.1% in the year ended March 2019. The outlook for the current year is worse.
India’s former chief statistician Pronab Sen told news website The Print that India could contract by 11.5% in the year to March 2021. He based his forecast on the lockdown ending on May 30, one month short of the new deadline of June 30.
Ironically, the agriculture sector helped support GDP numbers, while the manufacturing and construction sectors reported negative rates for the past few quarters.
Growing desperation, especially among those paid on a per-day basis or who have temporary jobs, as lockdown erodes their savings, may also have forced the government’s hand to ease restrictions earlier than they would have liked, say analysts.
India’s per capita income is low at US$1,777 with a skewed income disparity in favor of the ultra-rich.
On May 30, the government said it was easing activities in hotels, restaurants and other hospitality services, as well as shopping malls and places of worship in areas least affected by the virus and declared to be out of the so-called containment zone. It has not permitted restarting public transport or full employee attendance at offices.
The government laid out a roadmap to evaluate, from July, the opening of schools, colleges and other educational institutions based on feedback from state governments. Most schools and colleges across India resume in July. In areas with a high incidence of Covid-19 cases, it left the decision to reopen with state governments.
In the third phase, at an unspecified date, the government would evaluate restarting city railway services, international air travel, cinemas, bars, gymnasiums, swimming pools, gatherings for social, political, cultural, sports, academic and religious events. But not all states suffer the same threat from the virus.
Maharashtra, India’s most industrialized state and a key player in kicking off the revival of India’s economy, extended its lockdown until June 30. It conceded relaxations aimed at improving supplies, enabling citizens to go for exercise and permitting plumbers, electricians and motor mechanic to help people in need.
Government offices are allowed to have 15% of their staff working, while private business offices are allowed 10%. Municipal buses and suburban trains would remain closed except taxi services with restrictions.
Citing examples of countries that face rising numbers of cases, state chief minister Uddhav Thackeray explained his reasons for a cautious approach: “We don’t want to relax something and then revoke it. We have to take our next steps very carefully.”
Major states such as Uttar Pradesh, Madhya Pradesh and Tamil Nadu have extended lockdowns until June 30, while West Bengal decided to extend to June 15. Most states have permitted only a limited number of activities and stressed social distancing. Some have levied penalties for spitting.
States are focusing on containing the spread of the virus and are increasing hospital bed numbers and support staff to deal with any rises in the number of cases.
India has tried to revive its economy, which is forecast to contract for the first time in four decades, by offering a $265 billion package on May 12. The plan comprising mainly credit guarantees failed to please the business community. The government could not give direct cash support because its fiscal deficit is already high.
Opening the economy was also critical since the four-month-long monsoon season starts this month from southern India. While a widespread and sufficient monsoon is critical for the economy, it also makes it tough for any business to start afresh after more than two months of lockdown.