Economy

COVID-19: A long economic quarantine

Forecast of high temperature, erratic rains and cyclone push India’s poor into a point of no survival return  

 
By Richard Mahapatra
Last Updated: Thursday 19 March 2020
COVID-19 pandemic will affect India's economy. Photo: Meeta Ahlawat / CSE

The novel coronavirus disease (COVID-19) pandemic has not brought out the inequality in our society. This is already accepted as an existential hazard in a free-market regime. It, rather, shows how economically marginalised groups suffer in the face of a health emergency of this proportion.

Consider the United States. The media has reported that a large number of people did not approach health centres despite bearing COVID-19 symptoms as they couldn’t afford it.

Per capita hospital beds are the least in the US, among developed economies; it doesn’t have universal healthcare and health insurance coverage is inadequate. The result: Many poor patients are forced to choose death over medical consultation.

India is currently on a warpath against the pandemic. All efforts until now have been to stop the spread of infections from those who have been found to be carriers. Many experts say that the spread will reach community transmission levels by mid-April.

Irrespective of it, Indians stare at the situation that Americans are in: Government facilities are highly inadequate and the and private healthcare dominates. Our out-of-pocket expenditure on health is so high it pushes people into poverty on the face of an emergency. The poverty rates, in fact, would increase 3 percentage points if such expenditures are factored in.

If COVID-19 spreads across India, what will it entail for the largely poor population?

For poor Indians, or the dominant rural population, it is a double whammy: Many daily wagers and low-level employees in sectors like garments and textiles already face loss of employment due to the disruption in the economy that the pandemic has induced. As restrictions on marine produce export were imposed, many poor fisher folk have lost livelihoods.

Second, they also would have to spend on healthcare — both as a precaution and, possibly, for COVID-19 treatment. A robust government health infrastructure would have helped, but it is absent.

Add to this, the seemingly long lockdowns across the country that already restricts economic activities. Many states have ordered shops and shopping malls and even rural markets to shut down for stopping mass gatherings. This is an induced demand suppressant. It aggravates the situation as economic growth is already slow, particularly in rural areas. States like Chhattisgarh, Jharkhand and Odisha are reporting drastic reductions in sale in local markets.

The economic quarantine will continue. A spell of erratic extreme rain events and hailstorms has already damaged crops in nine states — a news that was buried under the deluge of COVID-19 coverage.

Even before we are through with the pandemici-induced economic quarantine, a severe heatwave spell will be upon us (April through June 2020), the India Meteorological Department has forecast. 

According to Lancet Countdown, which documents climate change impacts on humans, India lost 75 billion work hours from rising temperatures in 2017 as people couldn’t take up regular, sustained work. One of the worst recent heatwave was in 2019.

Manual labour remains the spine of rural economy, gradually displacing agricultural income. Millions are already under economic stress due to the economic slowdown. The COVID-19 disruption will add to the economic uncertainty.

The World Meteorological Organization has predicted erratic rainfall and more cyclones (June to October) for India for 2020, besides high-temperature episodes. Thus the majority of workforce in India engaged in agriculture directly or indirectly have to endure the economic disruption spilling over to the whole year.

What does it mean?

People will slipped further into economic poverty. It will restrict their capacity to bear shocks like added expenses at hospitals or to remain without regular incomes. But do they have a choice?              

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