No Buses, No metros, No trains, No flights; only vital services open. More than 1.3 billion people urged to stay in their homes. India’s Prime Minister Narendra Modi has imposed a nationwide lockdown to slow the spread of the coronavirus.
India under 21 days lockdown
India, the world’s second-most-populous country, is going all out to prevent the spread of coronavirus cases in a country. “It is a kind of curfew… If we are not able to manage the upcoming 21 days (of nationwide complete lockdown), we will be pushed back 21 years. Today, India is at the stage where our actions will decide to what extent we can bring down the impact of this disaster. This is the time to strengthen our resolve again,” he added.
Why is Lockdown necessary?
Now the challenge is to protect the people in the country where hundreds of millions of citizens are poor and countless millions live in compact urban areas that come with poor sanitation and weak public health care.
Though India’s number of reported coronavirus infections remains relatively low (above 500), the fear is that, if the virus explodes as it has in the United States, Europe or China, the consequences would lead to a disaster far bigger than anywhere else and adding on, there are no significant number of tests happening.
A Halt in economy
Prime Minister’s heartfelt appeal to citizens not to step out of their homes did not include specifics about how they would meet basic needs and how will it affect the economy. (Hopefully, the Government has plans for the same).
A complete halt to economic activity, the first two rounds of coronavirus outbreak have now washed off Rs 52 lakh crore worth of equity investor wealth, with benchmarks Sensex and Nifty languishing at multi-year lows after falling 35 percent from their January peaks.
According to the reports, January was the month when the virus was spreading in China at a rapid pace. It brought about the first round of impact on India, where companies saw supply-side interruptions, owning to their over-dependence on Chinese imports.
Sectors like autos and pharmaceuticals were impacted severely due to a shortage of imported components. As the virus continued spreading in India, it flagged the way for the second-round effect, where economic activity came to a halt due to lockdowns.
Tightening the cost of the COVID-19 lockdown, analysts on Wednesday sharply lowered their growth measures and emphasized on the need to announce an economic aid.
“The Indian government has so far been largely silent on the economic impact from the lockdown, leave alone any measures to cushion the hit,” a statement said.
Economic aid package
As Prime Minister announced a three-week complete lockdown, the equity markets were in the red early into the trade on Wednesday, down 0.47 percent, sources revealed.
“We estimate that the combined shutdown cost around USD120 billion or 4 percent of the gross domestic product (GDP),” British brokerage Barclays said in a note, revising down its FY21 growth forecast by 1.7 percentage points to 3.5 percent.
India needs a lot more, there is plenty of business room but a little option on the fiscal aspect. Finance Minister Nirmala Sitharaman, while announcing some measures to help the economy on Tuesday, had hinted that an economic aid package is in the making.