Lockdown avoided Covid fatalities, but may cost lives indirectly: Study
The working paper titled Interim Report on India’s Lockdown, submitted to American non-profit research agency National Bureau of Economic Research (NBER), analyses the philosophy of the lockdown in the Indian context, its impact, as well as the administration’s response to mitigate these consequences.Updated: Jun 04, 2020 04:59 IST
The lockdown to curb the spread of the coronavirus disease (Covid-19) in India will have a lingering impact on lives, not just livelihoods, a working paper by two prominent economists has said, identifying violence, starvation, indebtedness and extreme stress as consequences of the shutdown that was in place in the last two months.
The working paper titled Interim Report on India’s Lockdown, submitted to American non-profit research agency National Bureau of Economic Research (NBER), analyses the philosophy of the lockdown in the Indian context, its impact, as well as the administration’s response to mitigate these consequences
Lockdowns, the authors contend, have been propelled across the world by the “enormous visibility” of Covid-19 fatalities. While in advanced economies, the cost of reducing these visible deaths is a “dramatic reduction” in overall economic activity, in India, “a developing country with great sectoral and occupational vulnerabilities, this dramatic reduction is more than economic: it means lives lost,” says the paper by professors Debraj Ray and S Subramanian.
The lives lost as a consequence of the lockdown will be invisible, the paper says, adding: “It is this conjunction of visibility and invisibility that drives the Indian response. The lockdown meets all international standards so far; the relief package none.”
Ray teaches at the New York University while Subramanian, a retired professor from Madras Institute of Development Studies, is a former member of the advisory board of the World Bank’s Commission on Global Poverty.
India’s nationwide lockdown was enforced first on March 25, before it was diluted in phases over the next three months. The period was marked by a widespread return of low-paid urban migrants, who undertook gruelling journeys by foot, on illegally running trucks and crammed into special trains to return to their villages and home towns after losing their jobs. Since June 1, India has been in the first phase of Unlock.
Union government officials have said the lockdown was successful in slowing the spread of the disease and buying time to improve infrastructure. The government last month announced a ₹20 lakh crore relief package but analysts have said that the actual government spending in the package could be much lower.
“Lives lost through violence, starvation, indebtedness and extreme stress, are invisible, in the sense that they will diffuse through category and time. Someone will die of suicide. A woman will be killed in an episode of domestic violence. The police might beat a protestor to death. The deaths will occur not just now, but months and years from now, as mounting starvation and indebtedness and chronic illnesses take their collective toll,” the authors write.
The authors cite three structural features that makes the Indian population vulnerable to a lockdown in the absence of welfare relief measures. “The first has to do with the ubiquity of casual labour, accounting for well over 20% of all Indian households — such individuals are particularly vulnerable.
“The second is the preponderance of informal production — well over half of India’s GDP is produced in the informal sector — and these are activities which cannot be easily taken online...
“Third, median household savings are low, and inadequate to take an estimated 38% of all households through even a 21-day lockdown (we are currently on our way to two months) if all their employment dries up,” the authors contend.
As of Wednesday, India has 216,677 cases. On Tuesday, Indian Council of Medical Research scientist Nivedita Gupta said the country was still “very far away from the peak”. Public health experts have said that this could inevitably force federal and local authorities to bring back lockdown curbs, a measure that one of the authors of the NBER working paper described “as an even worse idea” compared to the first lockdown.
“A severely comprehensive and draconian lockdown, and furthermore one without compensating welfare measures in place, was never a good idea, and is an even worse idea now in the light of the costs of the lockdown till date—costs in terms of loss of lives, loss of employment, loss of incomes, and the neglect of other (non-Covid-related) morbidities,” Subramanian said in an interview over email to HT.
Subramanian added that the government will need to take a slew of measures if it is to consider such an intervention again. He divided these steps into five specific areas:
(1) Adopt genuine fiscal policy measures such as “spend substantially more on compensating relief measures, raise more resources through rudimentary taxation of the wealth of the super-rich, and not rely predominantly on supply-side strategies such as liquidity expansion involving the channelling of credit through banks”;
(2) Address “supply-side constraints in the form of physical bottlenecks—restrictions on mobility, closed mandis, etc -- still waiting to be eased”;
(3) Deal “with the states of the Union in a genuine spirit of partnership and assistance, beginning at least with settling their dues in terms of their share of revenue from GST”;
(4) See “the wisdom of engaging a panel of public health specialists, epidemiologists, social workers, economists, other social scientists, trades unions, and opposition politicians who all have a stake in this country,” and;
(5) Address “both the epidemiological and social security problems that are upon us in a spirit of openness, mutuality, and special respect for those rendered most vulnerable by both the material and social burdens imposed by the pandemic.”
The panel that Subramanian suggested in the fourth point should be in a position to advise on the merits of selective lockdown that “discriminates both geographically and with respect to specific industries and economic activity.”
“The panel can also assist with identifying and overseeing the implementation of key relief measures—both cash and in-kind—which have been suggested by several commentators,” he added.