For Those REALLY In A Hurry: What Economic Survey Says About India's Handling Of The Covid-19 Pandemic

One of the first chapters in the economic survey focuses on India’s approach towards the pandemic. The survey looks at how India and it states have performed as it attempts to put some context to the present economic scenario.

The key takeaway is that India’s approach was one that minimised losses during uncertainty and this loss was measured by preserving as many lives as possible.

Thus, the concerns were humanitarian and it meant that even if we were to suffer a temporary contraction, the economy could recover to make up for the same. It outlines that there are several states that have performed better than others – and that lockdown had an impact on growth, but India is witnessing a V-shaped recovery.

One of the interesting parts of the chapter was to put in context the stringency index that was provided by the Oxford Government Response Tracker and develop a similar index for Indian states.

An important point made by the chapter was about how the global economy was suffering a synchronised contraction with 90 per cent of all countries registering de-growth.

However, India managed to be ahead of the curve because it understood the policy response that was consistent with what leading researchers had illustrated over the years.

A good example is the extent of policy support that was extended to the poor to preserve their consumption early on while the government conserved its ability to provide a stimulus and went ahead with it only after the lockdown restrictions were lifted.

Doing so was critical as we would have wasted a lot of resources in providing a stimulus when there was limited scope for private consumption to pick up.

The survey also makes an important point pertaining to the need for providing policy support for two years as it will take two years for us to fully recover from the crisis.

The growth forecast of 11 per cent for the coming fiscal is consistent with the IMF projections, but it is over the 7 per cent contraction (I still maintain that contraction will be contained under 7 per cent).

Overall, the survey does a good job of compiling and putting together relevant material to contextualise the present economic scenario and here’s hoping that many who comment on such issues would take some time out to at least read the first chapter if not more.