ExplainSpeaking: Options to unflatten the economic growth curve

Flattening the curve of Covid-19 infections comes with the flattening of the curve of economic activity.

3 min readNew DelhiUpdated: Apr 28, 2020 07:01 PM IST

ExplainSpeaking: Options to unflatten the economic growth curve

The lockdown has resulted in India’s GDP predictions plummeting from 6.5% to as low as zero in the current financial year; some even expect a contraction this year. (Express File Photo by Pavan Khengre)

Hello,

I am Udit Misra, and I write on the economy in The Indian Express.

Now, flattening the curve of Covid-19 infections comes with the flattening of the curve of economic activity. As many of you would have noticed, the lockdown has resulted in India’s GDP predictions plummeting from 6.5% to as low as zero in the current financial year; some even expect a contraction this year.

Last week, two events — one international and one national — provided a glimpse of the trade-off between physical and financial health that we all face.

The first was the historic decline of crude oil prices in the US as the May contracts of West Texas Intermediate touched the “minus $40 per barrel” level on April 20. The remarkable weakness in oil prices points to a demand destruction like none other in human history. Worse, it suggests that this weakness is likely to continue for a while.

The second event was closer home. One of the most well-known mutual funds, Franklin Templeton, shut down six of its funds blaming the Covid-19 disruption. Some believe this is a one-off event while others believe this portends poorly for investors. Indeed, who can be sure about the economy at this juncture?

Read | The big decision on the unlockdown, its scope and reach

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But what of the response in India’s economic policymaking?

The most important development to look out for is the unveiling of another fiscal relief package by the central government.

Considering that the coronavirus crisis is likely to drag the economy down for at least several months now, it makes sense at one level for Finance Minister Nirmala Sitharaman to keep some of the powder dry for the future, and not try to simply spend her way out of the crisis.

Yet, on the other hand, the more the government allows the economic crisis to deepen, the more complicated and, indeed, costly will it get to unflatten the curve of economic growth.

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So, from the economy’s standpoint, some of the key questions to watch out for this week are: Will there be a fiscal stimulus? If so, how big, and who will be the targeted beneficiaries? Will the super-rich be taxed more? Will there be an extended moratorium on dragging companies to the insolvency tribunals? And last but not the least: Will the government ask the RBI to monetise its deficit?

We’ll see.

Wishing you the best, and stay safe.

Udit

Udit Misra

Udit Misra is Senior Associate Editor at The Indian Express. Misra has reported on the Indian economy and policy landscape for the past two decades. He holds a Master’s degree in Economics from the Delhi School of Economics and is a Chevening South Asia Journalism Fellow from the University of Westminster. Misra is known for explanatory journalism and is a trusted voice among readers not just for simplifying complex economic concepts but also making sense of economic news both in India and abroad. Professional Focus He writes three regular columns for the publication. ExplainSpeaking: A weekly explanatory column that answers the most important questions surrounding the economic and policy developments. GDP (Graphs, Data, Perspectives): Another weekly column that uses interesting charts and data to provide perspective on an issue dominating the news during the week. Book, Line & Thinker: A fortnightly column that for reviewing books, both new and old. Recent Notable Articles (Late 2025) His recent work focuses heavily on the weakening Indian Rupee, the global impact of U.S. economic policy under Donald Trump, and long-term domestic growth projections: Currency and Macroeconomics: "GDP: Anatomy of rupee weakness against the dollar" (Dec 19, 2025) — Investigating why the Rupee remains weak despite India's status as a fast-growing economy. "GDP: Amid the rupee's fall, how investors are shunning the Indian economy" (Dec 5, 2025). "Nobel Prize in Economic Sciences 2025: How the winners explained economic growth" (Oct 13, 2025). Global Geopolitics and Trade: "Has the US already lost to China? Trump's policies and the shifting global order" (Dec 8, 2025). "The Great Sanctions Hack: Why economic sanctions don't work the way we expect" (Nov 23, 2025) — Based on former RBI Governor Urjit Patel's new book. "ExplainSpeaking: How Trump's tariffs have run into an affordability crisis" (Nov 20, 2025). Domestic Policy and Data: "GDP: New labour codes and opportunity for India's weakest states" (Nov 28, 2025). "ExplainSpeaking | Piyush Goyal says India will be a $30 trillion economy in 25 years: Decoding the projections" (Oct 30, 2025) — A critical look at the feasibility of high-growth targets. "GDP: Examining latest GST collections, and where different states stand" (Nov 7, 2025). International Economic Comparisons: "GDP: What ails Germany, world's third-largest economy, and how it could grow" (Nov 14, 2025). "On the loss of Europe's competitive edge" (Oct 17, 2025). Signature Style Udit Misra is known his calm, data-driven, explanation-first economics journalism. He avoids ideological posturing, and writes with the aim of raising the standard of public discourse by providing readers with clarity and understanding of the ground realities. You can follow him on X (formerly Twitter) at @ieuditmisra ... Read More

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