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Wednesday, September 23, 2020

Unplanned localised lockdowns did little to check spread of Covid, led to increased economic uncertainty

These localised lockdowns end up disrupting the supply chains and increase the level of uncertainty in the system, impacting the decisions by entrepreneurs to re-hire workers or scale up operations.

Written by Aanchal Magazine | New Delhi | Updated: September 7, 2020 9:53:03 am
West Bengal, Uttar Pradesh, Punjab and Haryana announced lockdowns, despite the Ministry of Home Affairs’ (MHA) directives to desist from imposition of these lockdowns and seek its clearance. (File)

The use of haphazard localised lockdowns by states in July and August, which badly impacted economic activity, has had little effect on tempering the Covid case count in these locations. State-wise data for states which imposed localised lockdowns during July 10-August 3 shows that the rise in new cases on a 7-day moving average basis, before and after the lockdown, ranged between 37-578 per cent in the seven regions which imposed localised lockdown during that period.

These localised lockdowns end up disrupting the supply chains and increase the level of uncertainty in the system, impacting the decisions by entrepreneurs to re-hire workers or scale up operations. West Bengal, Uttar Pradesh, Punjab and Haryana announced lockdowns, despite the Ministry of Home Affairs’ (MHA) directives to desist from imposition of these lockdowns and seek its clearance.

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Research by State Bank of India (SBI) shows that the 7-day moving average of new cases increased by August-end in states such as West Bengal, Uttar Pradesh, Punjab, Haryana, Chandigarh, Mizoram and Hingoli district in Maharashtra when compared with the 7-day moving average before the lockdown was announced. “States have resorted to partial lockdowns in July and August. However, the same has not led to a lower number of Covid cases. The 7-day moving average of new cases increased by August-end in all those states when compared with the 7-day moving average before the lockdown was announced. States must move out of the self-imposed lockdown mentality,” the SBI report stated.

Meanwhile, the national 7-day moving average for the same period showed that the new cases rose by 44,379 or 190 per cent to 67,615 cases from 23,236 cases during the same period.

The initial four lockdowns were initiated with the specific purpose of lowering the rate of transmission and preparing the systems for an anticipated increase in cases, which, according to public health expert Chandrakant Lahariya, did serve that purpose. There was increased testing capacity, better provision of isolation, oxygen and ICU beds and ventilators. But the subsequent localised lockdowns have failed, even as they have impacted the feeling of certainty that businesses need to scale up operations to pre-lockdown levels, analysts said.

Many states imposed full and partial lockdowns in July and August. West Bengal had announced complete lockdown for July 23, 25 and 29, Uttar Pradesh imposed lockdown between July 10-13, Bihar imposed between July 16-31 and Haryana had announced weekend lockdowns for all offices and shops, except those dealing in essential services, on August 21.

The MHA, on August 29, decided to rescind the power of states to impose lockdowns outside the containment zones. It had in the past written to states multiple times to not restrict the movement of people and goods across district or state borders. “State/UT Governments shall not impose any local lockdown (State/ district/ sub-division/ city/ village level), outside the containment zones, without prior consultation with the Central government. There shall be no restriction on inter-state and intra-state movement of persons and goods,” the norms said.

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After the guidelines, states such as Haryana have tweaked their lockdown orders allowing markets in non-containment zones to operate on all days. West Bengal has, however, announced state-wide lockdown for September 7, 11 and 12,

The Finance Ministry, in its latest monthly economic review for August, has said that India enforced the most stringent lockdown in the April-June quarter, which got reflected in the sharp Gross Domestic Product (GDP) growth contraction of 23.9 per cent — the worst amongst the G20 countries. It, however, said that the lockdown has enabled India to restrain the pandemic induced death rate to one of the lowest in the world and the country is now witnessing a V-shaped recovery.

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State-wise data for case recovery and fatality rates showed that case fatality rates are higher than the national average in states of Maharashtra, Delhi, Gujarat and Punjab, a Finance Ministry report showed. In fact, the fatality rate is even higher than the recovery rate in states of Maharashtra, Gujarat and Punjab, it showed.

The maximum number of new cases are being seen in rural areas. In August, among the top 50 worst affected districts which witnessed the maximum number of new cases, 26 were rural, the SBI report said. Rural areas in Andhra Pradesh are the worst hit, while Maharashtra, Karnataka and Uttar Pradesh are showing increasing rural spread. Among the rural districts which have less than 50 cases in April and where spread has been more in August, there are four districts which contribute more than 10 per cent to respective Gross State Domestic Product (GSDP). State-wise GSDP losses show a disproportionate loss in rural areas of states like Andhra Pradesh, Uttar Pradesh, Telangana and Rajasthan, with these states mostly producing cereals and pulses, it said.

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