Fighting Covid cannot justify continued destruction of businesses and livelihoods
CMIE says 1 in 4 jobs have already been lost. Fighting Covid cannot justify continued destruction (demolition) of businesses and livelihoods
The latest data from economic think tank CMIE suggests that between March and April 2020 one in every four employed persons lost their job in India. The job losses are disproportionately high in the informal economy that employs around 90% of the workers. The obvious takeaway is that without a well scripted recovery the country’s track record of lifting millions out of poverty will suffer a dangerous setback. Urban and rural poverty will shoot up substantially. Continued economic stasis will also see increased suffering in formal sector jobs, alongside deteriorating (becoming progressively wors) health indicators like malnutrition (undernutrition) and infant (newborn) mortality.
This is why neither the Centre nor states should be focused on the Covid-19 dashboard alone. Telangana has become the first state to announce an extension beyond Lockdown 3.0 to May 29. Chief Minister K Chandrashekhar Rao says that this is in the interest of preserving the “considerable progress” in controlling the spread of the pandemic. Healthy economic activity will not resume until the country remains a patchwork quilt of locked down and open zones. From manufacturing to services it needs a seamless movement of people and goods to run a growth engine. Consider how Karnataka’s neighbor is attempting to halt the exodus of migrant labourers because now it undermines all efforts to kickstart the economy. If some states are loosening the borders but others are tightening them, it will be a logjam (a crowded mass of logs blocking a river) anyway.
For India the pandemic came on the heels of a weakening economy, particularly a stalled financial sector. Add to that India’s lockdown having been more severe than most countries, including advanced countries. But while the fiscal response of advanced economies has been something like 8.5% of GDP India’s has been around 1%. The Centre and states have done well to save lives from the Covid infection. But they now need to do much better to save livelihoods.