India’s strict and effective lockdown helped save 100,000 lives: Economic Survey

In the Economic Survey tabled in the Parliament ahead of the Budget Session, the first chapter is about India’s policy response to COVID-19 which states that India’s strict lockdown measures helped to save more than 100,000 lives and has also been effective in controlling the COVID-19 pandemic by restricting the spread by 3.7 million cases.

“When history studies India’s response to the COVID-19 pandemic, history will conclude that India’s policymaking was mature. WIllingness to take short term pain for long term gain shows the maturity of India’s policymaking,” India’s Chief Economic Adviser KV Subramanian said in a press conference.

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Vigorously defending the March 2020 lockdown the Survey says India recognised that while GDP growth will recover from the temporary shock caused by the pandemic, human lives that are lost cannot be brought back. Policymakers drew lessons from the Spanish Flu, Nobel Prize-winning research and the Indian epic Mahabharata as they bet that a quick, intense lockdown would later drive economic growth and employment.

“Indian policymakers, backed by evidence, recognised that the lockdown would adversely impact economic activity and disrupt livelihoods,” the Survey said. The government used the crisis to boldly implement long-pending reforms to propel economic growth. As a result, India is witnessing a V-shaped recovery with a stable macroeconomic situation aided by a stable currency, comfortable current account, boom in forex reserves, and encouraging signs in the manufacturing sector output.

With the declining number of cases after it reached its peak in September 2020, India’s economy has also been recovering, which is evident in the GDP performance despite increasing mobility. The Economic Survey also said that while the GDP may contract by 7.7% in the current fiscal, the real growth will be seen in FY22 with an 11% GDP growth.

To assess the effectiveness of the policy response the Survey estimated, based on the population, population density, the demographics and the number of tests conducted, what might have been the caseload and deaths in the absence of the policies adopted. Applying the case fatality rate of the worst affected countries to India, the Survey the model calculated the country prevented over one lakh possible deaths.