A Critique of the Indian Government’s Response to the COVID-19 Pandemic

Read article in Journal of Industrial and Business Economics

Abstract

The most destructive effects of Covid-19 in India have not been the result of the disease, but the nature of the government response. The most stringent lockdown in the world destroyed the economy and forced millions into poverty and hunger, but did not control virus transmission. The resurgence of disease as restrictions were lifted and the continued economic distress point to ten major features of state response that ensured these unfortunate outcomes.

The COVID-19 pandemic unleashed a dramatic economic collapse and humanitarian catastrophe in India. However, the most destructive outcomes did not result from the trajectory of the disease, but from the nature of the government response. Early into the pandemic, the Indian government imposed a national lockdown that was the most stringent in the world, with curfew-like regulations confining people to their homes, preventing most economic activity and prohibiting movement other than for limited specified tasks. This draconian closure delayed the virus transmission but did not control it. At the start of the lockdown on 25 March the country had only 320 cases (mostly confined to a few regions) and ten deaths from COVID-19 in a population of more than 1.3 billion. By the end of June, India had become the third worst-affected country in the world, just behind the United States and Brazil and on course to overtake them with around 20,000 new cases reported every day. There were more than 550,000 confirmed cases of COVID-19, with a death toll of around 17,000 (both numbers likely underestimates, because of low testing rates and late reporting/misreporting of COVID-19 deaths). The disease continues to spread exponentially.

India currently seems to be caught in the worst of both outcomes: inability to control the disease, combined with immense economic losses and massive human tragedies resulting from the lockdown and associated collapse of employment and livelihoods. While COVID-19 deaths have continued to increase, unnecessary deaths resulting from the lockdown have also grown, with at least 600 such death reported by late May. These include at least 12 deaths resulting from policy brutality on those deemed to have violated lockdown restrictions and a growing number of deaths of migrant workers attempting to reach their homes in difficult circumstances.

As in most other countries, the lockdown dealt a massive blow to both demand and supply—but with even greater effects on employment. Around 120 million jobs were lost in April alone (Vyas 2020). The greater part of the non-agricultural work force simply had no livelihood for at least 2 months, with no choice but to fall back on existing savings or borrowing for survival. The worst affected were migrant workers (estimated to be around 100–150 million in number). The slight revival in employment in May, as lockdown restrictions were eased somewhat, was not matched by equivalent wage incomes, as wages and self-employed incomes remained much lower than before.

What explains this unfortunate combination of failure to control the pandemic along with extreme economic distress? Ten features of the Indian government’s policy response can be identified in this regard:

• The unthinking adoption of containment strategies not suited to the Indian context;
• Excessive centralisation and top-down control, without co-ordination between central and state governments;
• Inadequate investment in and preparation of health systems, facilities and personnel;
• Misplaced timing and delayed responses in several critical areas;
• Parsimony of the relief measures, despite inflated declarations about the official packages;
• Inadequate government spending to increase demand to counter the collapse in economic activity;
• Misplaced focus on measures to increase liquidity;
• Further privatisation of state assets and relaxation of regulations relating to land, labour and environment;
• Class, caste and gender biases of the policy responses; and.
• Suppression of democratic rights and crackdown on dissent during the lockdown.