Economy or Public Welfare?
Updated: Apr 6, 2022
The world has been distressed ever since the arrival of COVID-19 on our planet. Everything’s gone for a toss and there is absolute chaos surrounding this lethal strain of the virus. Countries are facing the threat of negative economic growth, uncountable unemployment and ballooning debt. While India has been quite late to the bandwagon it is also in an equally dire shape. India is at the edge of a cliff right now as it has two difficult questions to answer- the crumbling economy or the public welfare?
The Indian economy observed one of the worst performances in the last decade amidst a consumption fallout which had led our growth rate to a mere 5%. Nationwide, people were banking on this year to help revive sales which would have eventually helped boost the economy but before any of it could happen the virus struck our shores. Now, we have another major crisis at hand and one, which not only scrapped all hopes of a revival but also brought fears of a contraction and unhealthy growth rates. The IMF is projecting all but grim forecasts for the Indian economy. Modi’s promise of a $5 trillion economy is surely going down the drain in light of the current situation!
Modi has up till now played hardball in all his decisions but now with the economy also at a cliff hanger he’s had to go soft in his actions against the virus. From today on there will be regulated economic activity going into action again. Kerala has even been given the go-ahead to open select districts in the state based on a zoning system. The initiative was taken to prevent a financial and economic meltdown in the state. Its success or failure will decide the future decisions of Modi on the nationwide lockdown.
Many sectors have gotten the clearance to start economic activity in bids to sustain the economy. The one caveat in those guidelines is the consumer response as without it there is no incentive to manufacture. With the virus rendering, many unemployed and more cash-strapped the consumer’s appetite to purchase has vanished. People are cutting down expenses, moving to conservative spending and saving on money. With this, the purchasing power of the economy has bottomed out and thus there is a lack of incentive for companies to resume manufacturing. So the idea of the economy slowly getting back on its feet sounds absurd until the lockdown remains.
Is it even worth it to impose a national lockdown at the cost of the national economy? The answer is a big NO.
Is it even worth it to impose a national lockdown at the cost of the national economy? The answer is a big NO. Still, India is far better off than many African countries but it isn’t close to countries like US, UK all of who can get through this virus. India has neither the financial prowess to sustain itself throughout this pandemic neither the administrative marvel to help contain the virus. Nobel Laureate for Economics Angus Deaton, at a Princeton University webinar last week, recently pointed this out as being the case for poor countries like India.
According to him, even with the shutdowns in place, the number of cases in countries like ours is sure to increase due to urban congestion, slum areas or poor administration system. With hoards of labourers unemployed, the government has the job of feeding them in community kitchens which leads up to hoards of people gathering in one place. Secondly, as a country, we aren’t conducting enough tests to know the actual number of infections which in itself is a ticking time bomb. With such bleak outcomes from the most stringent of measures, the question remains- Is it even worth it to impose a national lockdown at the cost of the national economy? The answer is a big NO.
We simply cannot afford two disasters at the same time. If we are still going to see an increase in the number of infections despite these measures then why not just lift the lockdown, issue guidelines for social distancing and see the economy resume normal operations. India is already at crossroads and the decision to save the economy is a more vital one as the financial prowess required to battle this virus will only come from a functional economy. Sweden proved the world that it has been able to contain the virus without any lockdown in place. We aren’t any Sweden, obviously, but then we gotta make a choice, one of them or both. In my opinion. Corona is still going to happen no matter how stringent a lockdown we have, saving the economy is vital as in the long run we will be dependent on it for growth, security and stability.