Lockdowns at the micro-level are slowing economic revival. Centre-State coordination is needed to monitor growth
Although the nation has entered the “unlock” phase of the pandemic-induced curfew to promote economic revival, the fact is continuing localised lockdowns in States are hampering production lines, supplies, delivery schedules and operational flows. Not that one can blame the States, considering the disease spiral that’s tormenting them in waves and peaks as well as creating new hotspots almost everywhere. So though the jury is still out on how much the lockdown capped the caseload, it is still being seen as the most effective way of staving off human interactions and large-scale community transmission. So, keeping economic imperatives in mind, State Governments are grading their lockdowns as partial, progressive or full-time. The problem is while businesses aren’t completely dysfunctional, allowed as they are to operate in non-restricted areas, they are inter-connected to supply and distribution chains across States. Stalling of operations in one State is bound to affect others as the cascading effect slows down the sector a particular business is into, and thereby grunts the overall economy. With attendance and production capacity affected by restrictions, some sectors cannot even take off optimally. Bengaluru is a prime example. With most IT workers having left the city, fresh curbs mean that they cannot return and the tech sector cannot acquire the desired momentum for recovery. All such micro-blocks are threatening to disrupt the little gains made in reviving the economy. A slew of economic relief measures, too, has failed to inspire confidence among businesses as corporate finances remain squeezed, sales have not regained momentum and demand remains low. Even the amount allocated for bailing out MSMEs remains largely undistributed.
Several economic hubs are currently under a resurgent wave of the virus. Bengaluru, which had initially contained the virus, has become a new hotspot. While it began experimenting with a limited lockdown during the weekends, it was compelled to go for complete shutdown once Karnataka became the State with the fifth-highest case load in the country. Pune, too, has been forced to become vigilant following a sharp spike. And with signs of community transmission now evident in two coastal hamlets of Kerala, this State, too, is in full lockdown mode. Uttar Pradesh has decided to enforce stringent restrictions during weekends. Punjab, on the other hand, has barred gatherings of people. Such has been the spike in infection that easing the lockdown process has inspired more fear than relief among the people. Such localised forms of lockdown though are not new. In the US, for example, which is witnessing a virulent second wave in the midlands, each State is imposing its own kind of curbs. Leicester City in UK was the first one to announce a local lockdown. Essentially, the challenge for the Government is three-pronged: One, combat the disease. Two, protect the economy and three, keep social behaviour in check. On all these counts, lessons have hardly been learnt from the earlier phases of the lockdown, which essentially slowed the trajectory of the virus but did not affect its infectivity. Till a vaccine/cure is found, we cannot be lax about safety protocols like mandatory wearing of masks, frequent use of sanitisers and maintaining social distancing norms in public spaces. The motto of personal safety for public good needs to be ingrained in us. Also, national and State level coordination is needed to keep economic activities going in sustainable formats wherever possible like housing labourers on-site or demarcating zones for greater community monitoring and excluding production hubs. There could also be a mapping of sectors, prioritising those that have a greater multiplier effect. Health being a State subject, the Centre’s hands seem tied in devising a mutually acceptable formula. But if no mechanism is evolved, then we are looking at a bad plunge in the economy. As it is ratings agency ICRA revised its FY21 GDP assessment on Thursday, forecasting a 9.5 per cent contraction from an earlier assessment of five per cent because of a “spate of localised lockdowns in some States and cities, arresting the nascent recovery that had set in during May-June 2020.”