India caught in Covid trap as lockdowns eased

India faces a Covid Catch-22. The number of daily cases jumped on Wednesday by a record 25,571 but the country has little choice but to ease lockdown measures to restart the economy.

To make matters worse, new Covid-19 hotspots appear to be shifting to the southern states and tech cities of Bangalore and Hyderabad.

As the third-worst affected country worldwide, India now has 769,574 cases, lagging only the 3.1 million in the US and 1.7 million in Brazil.

After imposing the world’s biggest virus lockdown for over two months beginning in March, many Indian states have gradually relaxed restrictions to help daily wage earners and businesses.

India’s central bank last month confirmed an economic contraction for the year. Independent estimates of the contraction vary widely from 4% to 11.5%.

However, easing the lockdown will expose people to less social distancing and increased contagion risks. This was initially seen in Mumbai, Delhi and Chennai, where the spread was faster because of population density.

Adding to the muddle is the sudden rise in cases in Karnataka and Telangana with their capital cities Bangalore and Hyderabad emerging as new Covid hotspots.

The 10 million-plus population cities are key knowledge export hubs, with concentrations of software services, program development, business processing outsourcing, and knowledge process outsourcing for the US and Europe.

Karnataka and Telangana have the worst rates of doubling coronavirus cases with 8.5 days and 9.5 days respectively.

Telangana has the highest percentage of people testing positive at 27.6%. It also has among the lowest number of tests per million at 3,284. Delhi, which ramped up its tests to 33,178 per million after warning from experts of a surge, has reined in the rise in its cases.

Compare this with Maharashtra, which has 223,724 cases, the most by any state but which has a better doubling rate of more than 23 days. Maharashtra, which earlier relaxed several restrictions to encourage manufacturing and ensure better supplies, yesterday opened all hotels and guest houses to operate with 33% capacity.

To restart businesses, industrialists are now seeking to lure back the millions of workers who virtually revolted out of the lockdown to flee the metropolis, unable to afford food and rent from their savings.

Some experts fear that transporting the workers back could be another challenge and may trigger faster rates of viral spread.

On Wednesday, India opened up all of its national monuments to earn income from tourists and local visitors. High numbers of cases in Agra prompted a delay in reopening the Taj Mahal, however.

State governments, too, are in dire need of revenues to carry out normal functions and fund health and other welfare programs. State governments are selling bonds to borrow more to fund their regular expenditures.

Federal government cash shortages are being compounded by a slowing economy at the same time defense spending is rising to contend with a border dispute with China.