Sunday, April 18, 2021

Re-visiting the Economic Survey on India's handling of the pandemic

The first chapter of the Economic Survey of 2020-21 is devoted to India's handling of the pandemic. The note of exuberance is unmistakable. The Survey claims that the early and stringent lockdown reduced the loss of lives and, at the same time, paved the way for a V-shaped economic recovery:

India’s policy response to the pandemic stemmed fundamentally from the humane principle advocated eloquently in the Mahabharata that “Saving a life that is in jeopardy is the origin of dharma.” Therefore, the “price” paid for temporary economic restrictions in the form of temporary GDP decline is dwarfed by the “value” placed on human life. As the Survey demonstrates clearly, using a plethora of evidence, India’s policy response valuing human life, even while paying the price of temporary GDP decline, has initiated the process of transformation where the short-term trade-off between lives and livelihoods is converted into a win-win in the medium to long-term that saves both lives and livelihoods.

One stringent lockdown and we were done with the problem- so the Survey suggests. India's experience was unlike that of many other countries that did not impose as stringent lockdowns and had to face second and third waves:

The analysis in the chapter makes it evident that India was successful in flattening the pandemic curve, pushing the peak to September. India managed to save millions of ‘lives’ and outperform pessimistic expectations in terms of cases and deaths. It is the only country other than Argentina that has not experienced a second wave. It has among the lowest fatality rates despite having the second largest number of confirmed cases. The recovery rate has been almost 96 per cent. India, therefore, seems to have managed the health aspect of COVID-19 well.

.....India, in fact, has been an outlier in its experience with COVID-19. It reached its first peak in mid-September, after which rising mobility has been accompanied with lower daily new cases .. Globally, many European countries and US have been facing deadly second and third waves around this time with easing of lockdowns and increasing mobility. Most countries had to re-impose intermittent lockdowns while India has been increasingly unlocking. These trends reinforce that India has been effective in combating the COVID-19 pandemic.

The message is clear: India had won the war on covid. The Survey went on to almost rule out any further wave of covid:

 Also, most countries experienced their subsequent waves within a period of 2-3 months of crossing their first peak. These second waves have been more lethal in terms of number of cases. (Figure 23). The fatalities in US were 2.9 times higher during second wave. The prospect of India facing a strong second wave is receding with the start of the vaccination this year.

 The authors of the Survey must be regretting those words!

Clearly, the severe lockdown last March was not the last word in the war. Did the analysis above lead policy-makers on to relax restrictions a trifle too hastily? It may appear so. 

But that raises another question: if lockdowns cannot be relaxed quickly enough, what does that bode for economic recovery? What is the correct severity of a lockdown at any given point in time? 

Alas, a year into the pandemic we are left with more questions than answers.


No comments: