THE HARD ROAD TO RECOVERY
The coronavirus pandemic has offered countries a tough choice—to either allow the disease to eat through the population before they achieve herd immunity and slow down the spread, keeping economic activity largely steady, or opt for a lockdown to lower disease incidence that can ‘flatten the curve’ and ease the burden on healthcare facilities, but at the cost of most economic activity. India’s choice of the latter—protecting lives over livelihoods—was a difficult one, as the country was already in a slowdown mode, clocking just 4.7 per cent growth in the third quarter of 2019-20. But having bitten the bullet, and effected a 21-day lockdown, what matters now is how India crafts an exit strategy for all business activity if the lockdown is lifted on April 15.
The government now faces an enormous task—to restart the economy before industrial paralysis, job losses and dried-up cash flows become another cause of death and despair. Former RBI governor Raghuram Rajan says India is facing “perhaps its greatest emergency since Independence”. He points out that even the 2008-09 global financial crisis was an extraordinary challenge, “but our workers could still go to work, firms were coming off years of strong growth, our financial system was largely sound and government finances were healthy. None of this is true today.”
THE EXIT STRATEGY
Sources say that hectic preparations are under way to chalk out an exit strategy. Since the pandemic is not over, an immediate, nationwide lifting of the lockdown might end up doing more harm than good. Nonetheless, the economic paralysis must be addressed, if only to ensure that essential items like food and medicines remain available in markets. And given the interconnected nature of modern economies—for example, food processing units cannot operate without agriculture, transport, fuel and packaging industries—this means that even if the lockdown is lifted in phases, it is crucial for interdependent industries to come online sequentially. Secondly, even ‘non-essential’ industries like automotives and textiles must get back to business soon, or else job losses and slashed salaries will lead to
