In the Covid-19 battle of life versus livelihood, India seems to be veering towards stepping up economic activity to overcome slow growth. The country yesterday reported a 23.9% contraction in the economy in the quarter to June 30.
The worst quarterly drop ever has increased the nation’s vulnerability, especially that of more than three-fourth of its 1.38 billion people who depend on regular incomes and can’t live off savings for long.
So, despite adding two million cases in August, India is opening up more areas of the economy, while ensuring none of them increases overcrowding and risks a further outbreak.
With 3.7 million total cases India remains the third-worst affected country, behind Brazil with 3.9 million cases and the United States with 6.2 million.
While India reported the fastest increase in new cases in August, it still has a lower fatality ratio compared with some other countries. This probably gives it greater confidence in opening up more activities each month. India has had 65,500 deaths so far compared with 121,515 in Brazil. But since there is no cure or vaccine in sight, it brings into question the efficacy of lockdowns.
The central government has permitted all metro trains to begin operating from September 7 with safe distancing to be observed. Estimates suggest Delhi Metro will be able to carry up to 40% of its usual capacity. Limitations notwithstanding, the news was warmly welcomed by commuters and those depending on passengers for income.
The government’s insistence on conducting all-India exams for admission to medical and engineering colleges and other university level examinations is a hint of the direction it plans to take. Institutes providing skill and entrepreneurship training can reopen. It will allow open-air theatres, social, religious and cultural activities for up to 100 people from September 21.
Maharashtra state, with 22% of all cases in India, is permitting hotels and lodges to operate at 100% capacity. In government offices it has permitted 100% of senior staff and up to 30% of subordinate employees from 10% now in Mumbai, Pune and neighboring districts and towns. Other areas can have up to 50% of employees in offices. All shops can open normal hours.
It has also relaxed the movement of people and goods between districts and states. While public transport including buses, suburban trains, and outstation trains are still not operational for the public, restrictions on travelling in cars and buses have been lifted.
The number of daily domestic flights to commercial capital Mumbai will now be doubled to 200. Regular international flights will have to wait until a September 30 review.
Still, restrictions stay on opening theatres, malls, assembly halls, public swimming pools and events involving a crowd. Unlike many other states, it has still not opened any religious place for worshippers, and imposes penalties for not wearing a mask and spitting in public.
Likewise, India’s Silicon Valley city Bangalore and its Karnataka state are permitting bars, pubs, clubs, and restaurants serving liquor up to 50% of their capacity. These activities not only earn state governments revenue but also provide employment and help the transport and hotels industries and restart the supply chains.
Supply chains had all but collapsed during the countrywide lockdown and severe transport restrictions made it tough for even construction workers to travel to work, adding to unemployment and loss of income at the bottom of the pyramid.
During the two-month lockdown from March 25, there was a complete shutdown of all modes of transport, construction, manufacturing, mining and services which together account for two-thirds of the economy. Agriculture reported growth of 3.4% since being the first sector where the lockdown was relaxed and lifted.
The worst impact of the lockdown was on construction, which halved during the quarter. Trade and hospitality contracted by 47%, and manufacturing 10%. Worse, the activities in unorganized, small and medium-scale businesses, which provide the bulk of the employment, was shut for most of the lockdown.
The World Health Organization yesterday warned that opening up societies without control over the infection would be a recipe for disaster.
“It’s not a one size fits all, it’s not all or nothing,” director-general Tedros Adhanom Ghebreyesus said.
“Decisions about how and when to allow gatherings of people must be taken with a risk-based approach, in the local context.’’