The Indian Economy

Deadly and frightening as it appears, it is still too early to estimate the severity of India’s Covid-19 second wave. Unlike the transatlantic countries where it appears to have peaked, India’s second wave is still trending upwards. While the second wave is more devastating, India’s unpreparedness is evident. India needs to recognise that such pandemics will come again. It needs to diversify and secure its supply chains, vaccine output, and upgrade its poor healthcare infrastructure. The Indian economy has been badly hit by the pandemic, with one of the highest output losses amongst major economies. One of the possible reasons for this is the limited fiscal support despite a stringent lockdown, with most of the heavy lifting done through monetary measures. Going forward, its economy needs to overcome several challenges before it can return to its former high growth trajectory.

It is still too early to estimate the severity of the ongoing Covid-19 second wave in India, as the graph is still trending upward. We need to watch out for incoming data. Although absolute mortality per million is still modest compared to the transatlantic numbers, it still accounts for the major share of Asian mortality (Sheel 2021c). India is the only country outside the Americas to have had more than 2,00,000 Covid-19-related deaths. During the last few days India has had amongst the highest global mortality figures. Lancet Covid-19 Commission India Task Force (2021) raised the prospect of a worst-case scenario of daily mortality of 2,320 deaths per day by early June, in the absence of adequate mitigation efforts. This figure was crossed by the end of April, itself.

It appears that India declared victory over the pandemic prematurely, as unrestrained electioneering and large religious gatherings like the Kumbh Mela were allowed (PTI 2021). It also did not prepare for a second wave despite early indications (Krishnan 2021). The Parliamentary Standing Committee on Health and Family Welfare (2021) laid its report in both houses on 2 February 2021, flagging the issue of oxygen shortage in hospitals, as well as the need to augment the public health infrastructure to prepare for a possible second wave.