The Indian economy is in “dire” straits as a lockdown to curb the spread of the deadly coronavirus has led to a whopping majority of households experiencing slashed incomes, a report has indicated.
The report by the University of Pennsylvania’s Wharton School published Tuesday stressed on how experts are questioning the phased reopening of select sectors in India as the number of coronavirus cases and deaths continues to rise.
The country – which, according to the Johns Hopkins University’s dashboard, was seventh on the list of countries with the most infections, as of June 8 – recently extended its lockdown through June 30 – but only in the containment zones.
The Indian government has so far unveiled three stimulus programmes worth in total at almost INR21 trillion, including a liquidity package worth INR7.2 trillion from the country’s central bank, announced before the coronavirus.
The report noted that “India’s GDP grew the slowest in 11 years at 3.1% [in the latest quarter] and is expected to contract by 6.8% in the current fiscal year”.
“The economic distress in India caused by the lockdown is dire. Nearly 84% of Indian households are seeing decreases in income since the lockdown began, according to a recent study by experts at the University of Pennsylvania, University of Chicago and the Mumbai-based Centre for Monitoring the Indian Economy (CMIE),” the Wharton School’s report stated.
The study the report cited also found a “‘sharp and broad negative impact on household income’ as the pandemic diminished their staying capacity”.
“Nearly a third of all households will not be able to survive beyond a week without additional assistance, it stated. That harsh statistic finds corroboration in the unemployment rate, which had crossed 27% in early May, up nearly four-fold from levels in January-February, according to CMIE data. The jobless rate has since dropped to less than 24%.”
One of the study’s authors, Wharton professor of business economics and public policy Heather Schofield, said: “Direct and immediate transfers of food and cash are very high priority.