Covid shadow on growth

With more panic-stricken states imposing restrictions in a bid to check the surge in Covid-19 cases, economists at India’s largest private sector lender, HDFC Bank, have estimated that growth might be impacted by up to 0.30 per cent in the January-March quarter. The slowdown could be worse than expected as economic activity is bound to take a hit in view of the restricted inter-state and intra-state movement of people. The sharp rise in the caseload, particularly of the Omicron variant, has prompted several states to enforce curbs such as night curfew and allowing restaurants as well as offices to operate at half capacity.

The experience of the first and second waves shows that lockdowns – national or state level – have caused irreparable damage to millions of livelihoods. India’s economy shrunk by a colossal 24.4 per cent in April-June 2020, when the world’s most stringent lockdown was in force. The second wave was far more devastating than the first, but the curbs were mostly short-term and local. With economic activity almost returning to pre-Covid levels, the April-June 2021 quarter witnessed a GDP growth of 20.1 per cent, though the low base of the year-ago period helped to paint an over-optimistic picture.

There is a strong case for keeping the disruptions to the bare minimum. The pace at which Omicron is spreading is far higher than the rise in hospitalisations. In Delhi, for instance, the rate of new infections has increased over 80 times than the lowest figure post the second wave, while the corresponding hospitalisations have risen only three-fold. Also, with the cumulative Covid vaccine doses administered in the country nearing the 150-crore mark, and teenagers coming under the ambit of the vaccination drive, there is no compelling reason to stop fully inoculated people from going about their day-to-day activities – provided they adhere to Covid protocols. Prodding the unvaccinated and partially vaccinated citizens to do the needful at the earliest is another step which can ensure that economic recovery doesn’t get derailed.

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