Tough for Indian Economy to Revive Even after the Lockdown by Mrinalini Sud SignUp
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Opinion Share This Page
Tough for Indian Economy to Revive
Even after the Lockdown
by Mrinalini Sud Bookmark and Share

Gradual ease of lockdown in Italy can be argued as a logical step to revive its economy. However, the same tactics would not help India where the realities are very different.

India enforced a nationwide combat the coronavirus lockdown after its first ten deaths, while Italy enforced it after 800 deaths. When India reached a count of more than 10,000 cases and 300 deaths, it decided to extend the lockdown for 19 more days starting from 14th April 2020. On the same day, Italy with a count of 150,000 cases and 20,000 deaths decided to gradually ease the lockdown.

In answer to the obvious question, Italy government took this decision, risking Italian lives, just for the sake of reviving their economy. Italy has been recorded as a high-debt, low-growth economy for the past twenty years. After two months of no produce, the country has come close to a recession so severe that it would reverse decades of gains from globalization. This is what forced the government reach a consensus to let the people leave home to work once again in the factories.

India’s GDP has been reported to have a single digit growth compared to Italy’s double digit. And according to Financial Times, the pandemic would further cut down India’s GDP by two-third, barely reaching 1.5%-2.8%.

That is the lowest since 1991.

To keep it simple, India astonished everyone by imposing nation-wide lockdown at such an early stage of the virus. It risked its already degrading economy. When Italy, with highest number of deaths, cannot take the economic risk of extending its lockdown, how come India is taking such a bold step? Will the Indian economy not benefit if the lockdown is gradually eased?

India Vs Italy

Italy is a developed nation. The best practice for a developed nation’s economy is to export a good percentage of its GDP. Likely between 30-35%. Italy exports 31% of its GDP, which includes textiles, clothing, footwear and food. It is also the world’s leading producer of wine. Every developed nation focuses to export more and import comparatively less. Making the economy export-centric rather than consumption oriented.

India, on the other hand, has 60% of its GDP driven by domestic consumption. Despite its large size, we are able to export only 10% of our GDP. This decreases our productivity and puts us in a bracket of developing nations.

The gradual ease in lockdown has allowed Italian businesses to reopen in accordance to social distancing norms. It would further allow workers to start producing goods and resume Italy’s trade-export in world market. With 31% of its GDP exported, Italy’s economy will benefit if its export trading is resumed.

The same tactics cannot be used to revive the Indian economy. With only 10% of its GDP exported, resuming export-trade would lead to a miniscule percentage. India has a domestic-consumption driven economy.

A sure shot way to revive our economy would be to persuade the public to resume their usual spending habits. To roam around freely and spend lavishly. Which seems impossible if fear of contracting the virus and consequent death looms around.

FOGO (Fear of Going Out)

Will you venture out if the lockdown is removed? Will you resume your pre-coronavirus routines? Or will you stay indoors till you are assured of zero infections?

Even after a decline in the infection rate, there will be a constant fear of going out. Celebrated author Mark Manson explains the changing trends in lifestyles in a post-coronavirus world: When we used to earlier be dreadfully anxious or fear missing out on experiences (FOMO), now we would fear on going outside (FOGO) . New experiences will not attract us the way they used to. We will gauge an excursion or a trip outside whether a risk worth taking. To simply stay at home or risk your life going to a birthday party. These life-decisions will become a part of our daily routines in a post-coronavirus world.

As we struggle to survive the pandemic, mental health has become a concern. A spike in cases of pandemic-induced stress has been reported all the over the country. The situation has become so severe that patients with no travel history or any symptoms are consulting doctors fearing a possible contraction of virus. A girl in Noida, who had beaten depression, returned to her therapy as her phobias returned. Carrying out meagre tasks, like going to a dairy to buy milk has now become a question of survival or death.

The fearful realities around us directs us to only one direction. If we want the pre-coronavirus normalcy to return, stringent measures need to be taken to eliminate fear. Elimination of fear in general public is the tool that will aid Indians get back to their usual lifestyles. Where panic and stress won’t loom around their routines. And a comeback can be made to their usual expenditures. To government’s usual expenditures. And hence a comeback for the Indian economy.

Steps to Eliminate Fear

The Indian government is doing everything in their power to combat the coronavirus. Imposing a total lockdown for over six weeks now, it is emulating China’s model of the 77 days’ lockdown. After which China showed no signs of local infections.

Our indigenous lockdown model at Bhilwara district of Rajasthan is a glimmer of hope. Bhilwara, which was identified as the first Indian epicenter for the virus, is now infection free. By imposing a total shutdown of the district, intense contact tracing of suspects, and disinfecting every street, Bhilwara has recorded zero infections since late March.

Conclusion

The only hope for the degrading Indian economy to at least maintain its expected GDP by the year’s end, is to resume pre-coronavirus public and government expenditure. Right now political leaders are working out how to get people back to work and get the economy going again. But elimination of anxiety in masses is the only way to get the Indian economy up and running. The coronavirus has to be removed not just from our societies but also from our minds. Merely opening up of trade exports to world, like Italy, won’t do the trick. India understands this need of the hour and continues to act on its motto. ‘Reviving domestic consumption to pre-pandemic glory for the revival of Indian economy.’

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21-Apr-2020
More by :  Mrinalini Sud
 
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