India attempts to balance economy, livelihoods and COVID-19 containment efforts

India had imposed lockdown to limit the spread of the COVID-19. However, in these containing efforts, its economy is suffering severely. Under such circumstances, it sketched out the first cautious steps out of the lockdown. It put forth an initial plan to put its battered economy back to work. It is also an attempt to restore its broken supply chain.

The government said on Wednesday that India will allow key parts of the economy to return to work. It will for areas where no infections have been reported. It will start on 20 April. It will include e-commerce, logistics, agriculture, infrastructure, and factories (that are located outside the municipal corporations and municipalities’ limit), etc.

India is fighting against the risk of the coronavirus outbreak that is spreading further through community transmission. The Narendra Modi government is attempting to balance it along with the livelihoods of as many as 400 million poor and the need to limit the damage to the economy.

The new Union home ministry’ guidelines will not apply to containment zones. These are the areas with COVID-19 infections. The restrictions in these areas will remain. In addition, the new permissions are conditional. If the rules are not followed leading to the further spread of the pandemic, it will be withdrawn immediately.

These plans come when India counted more than 12,000 infections and 400 deaths. On Tuesday, the International Monetary Fund slashed its FY21 growth projection for India to just 1.9%. In January, it was projected by 5.8%. For 2020, Barclays cut its growth forecast for the country to 0%.

New guidelines were welcomed by the companies. However, economists said the steps do not go far enough to boost growth during the current fiscal.

Regarding relaxation of lockdown after 20th April, Lobby group Confederation of Indian Industry said in a statement that the detailed guidelines issued by the ministry of home affairs are in the right direction. It will ensure preventive measures for COVID-19 spread while permitting certain economic activities to be restarted.

Secretary-General at lobby group Assocham, Deepak Sood, said in a statement that according to their back-of-envelope calculations if it is implemented well, economic activities can be restored to the extent of 30-40%.