April 26, 2020 2:45:36 am
Quantifying the impact of COVID-19 on the Indian economy under different scenarios, a study by IIT-Bombay says that at an aggregate level, the lost income to marginal workers is Rs 58,000 crore or 0.41 per cent of GDP for the three weeks of lockdown until April 14.
The impact soars to Rs 1.65 lakh crore, which is 1.18 per cent of GDP, if the lockdown lasts for two months, says the study by professors Haripriya Gundimeda and Vinish Kathuria.
COVID-19 is estimated to impact directly marginal workers (casual labourers and workers involved in MNREGA), consumption expenditure and state domestic product (SDP), the study says. The impact on the economy has been assessed at three different levels — on lost work opportunities for labourers, livelihoods impacted due to reduced consumption and stalling of economic activity in the formal sector.
“The estimates suggest wide variation in values across districts and states depending on their dependence on these services and structure of the state economy. However, at an aggregate level, for an Indian economy of the size of Rs 140.78 lakh crore (2018-19 estimates), the lost income to marginal workers is nearly Rs 1,16,160 crore (0.83 per cent of GDP) for 42 weeks of lockdown,” it says. “Not unexpectedly, the most impact is to marginal workers from Uttar Pradesh, Telangana, Bihar, West Bengal and Madhya Pradesh…,” it says.
It adds, “The figure for lost consumption expenditure is Rs 2,21,084 crore for 42 days. Maharashtra, Uttar Pradesh, West Bengal, Tamil Nadu and Andhra Pradesh are the top five states affected by this, forming nearly 45 per cent of the lost expenditure. Regarding lost GSDP due to lockdown, the figure is Rs 11,8756 crore (8,43 per cent of GDP) for 42 days of lockdown. As expected, Maharashtra, Gujarat, Tamil Nadu, Uttar Pradesh and Karnataka suffer most with a nearly 47 per cent lost GSDP.”
However, these estimates reflect only the direct impact on the economy, social sector and household consumption but not the aftermath of the pandemic: the financial anguish, bankruptcies and increased unemployment, said Gundimeda.
‘Definition for identifying hotspots need to change’
Researchers have suggested the government’s current definition for identifying hotspots need to change. “The current method for identifying hotspots is based on the number of positive cases, intense testing and asymptomatic patients. But the social vulnerability component needs to be added to the risk factor. Indicators such as states with higher number of children and elderly, household conditions, percentage of homes having toilets and drainage facilities etc needs to be taken into consideration,” said Prof Subhankar Karmakar from IIT-B, who has worked on the epidemiological risk model along with other researchers as part of the study.
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