Economic Survey Describes How India’s Covid Response, Inspired By Dharma And Science, Helped Save Lives And Livelihoods

Given that India is currently witnessing the worst pandemic in over a century which has infected tens of millions of people and claimed hundreds of thousands of lives across the world, it wasn’t a surprise that the first chapter of 2020-21 Economic Survey is all about how the governments, at the centre and states, have handled this once in a century crisis.

However, what surprised many (pleasantly or not) was the choice of quotation with which authors of the Survey chose to open the chapter with. It’s a shloka from Mahabharat’s Shanti Parva.

आपदि प्राणरक्षा हि धर्मस्य प्रथमाङ्कुरः। (Saving a life that is in jeopardy is the origin of dharma)

‘India’s response stemmed from the humane principle advocated eloquently“ in this verse, reads the Survey. The focus was naturally on saving the lives first followed by responding to the unprecedented economic crisis unleashed by the pandemic. ’Lives lost cannot be brought back but the temporary loss to the economy can be recovered’ was the common sense logic that inspired the country’s response - rooted in India’s civilisational ethos.

The Indian government also learned from history. It ‘drew on epidemiological and economic research especially those pertaining to the Spanish Flu’ which resulted in adoption of two public health measures to control spread of COVID-19: reducing interactions between people with measures like quarantines while simultaneously encouraging better sanitary practices to check spread of the germs.

Some simple truths that India internalised from past successes in controlling pandemics were: flattening the curve of infections using measures like early, intense lockdowns so that healthcare systems aren’t overwhelmed and fatalities are lowered primarily by restricting mobility of population - it was especially important given India’s higher population and density which would’ve been ideal for the virus to spread faster.

‘Indian policymakers followed an approach similar to the Barbell strategy in finance – hedging for the worst outcome initially, and updating its response step-by-step via feedback,’ the Survey notes.

The Survey goes on to estimate the natural number of cases and deaths expected across countries based on their population, population density, demographics, tests conducted, and the health infrastructure, and compares these estimates with actual numbers to show that india restricted the Covid-19 spread by 37 lakh cases and saved over one lakh lives.

The team of economists which prepared the Survey have also constructed a stringency index to asses the performance of India’s states in implementing the lockdowns. They conclude that the under-or-over performance in cases and deaths (compared to the expected) correlates strongly with the stringency of the lockdown. More stringent the lockdown by a state, more lives it has saved.

As per the stringency index and state-wise data of cases and fatalities, Uttar Pradesh, Gujarat and Bihar have restricted the case spread the best. Kerala, Telangana and Andhra Pradesh have saved the most lives whereas Maharashtra has under-performed the most both in restricting the spread of cases and in saving lives.

Additionally, the economic recovery is also sharper in states which implemented lockdowns effectively.

The causal impact of lockdowns on saving lives and economic recovery is an important lesson that all future governments must keep in mind while responding to a health crisis like this in future. This data based analysis is a stinging rebuke to politicians like Rahul Gandhi and businessmen like Rajiv Bajaj who prematurely criticised the Modi government for lockdowns.

The government was also criticised by many eminences - from Nobel Laureates like Joseph Stieglitz to lowly trolls on social media - for not giving any Big Bang stimulus package during the lockdown period. Even on this front, it’s the government which has proved to be wiser.

‘India recognized that, unlike previous crises, the Covid pandemic affects both demand and supply. Furthermore, given disruptions in the labour markets that can affect disposable income and firms suffering financial distress, the loss of productive capacity due to hysteresis could not be ruled out. Therefore, a slew of structural reforms were announced; together, these would help to expand supply significantly in the medium to long term. on the demand side, at the onset of the pandemic, India’s policies focused purely on necessities. This was optimal given the uncertainty and the resultant precautionary motives to save as well as the economic restrictions during the lockdown. After all, pushing down on the accelerator while the brakes are clamped only wastes fuel,” the Survey reasons.

Once the unlocking of the economy started, the demand-side measures were announced in a calibrated manner, including but not limited to a public investment programme centred around the National infrastructure Pipeline which will help accelerate the demand push and further improve the recovery.

‘The upturn in the economy while avoiding a second wave of infections makes India a sui generis case in strategic policymaking amidst a once-in-a-century pandemic,’ the Survey says.