The WHO characterised COVID-19 a pandemic on 11 March 2020. Several countries have since adopted a number of measures to counter the spread of the virus. The measures have focused on encouraging social distancing including lockdowns in some countries, and have also seen important announcements from governments and central banks on the fiscal and monetary fronts to support their respective economies. The Indian government and the Reserve Bank of India too have announced several measures. The impact on the Indian economy will not only depend on the effectiveness of the measures announced domestically, but also on the efforts undertaken globally to halt the spread of the virus and cushion the economic impact on households and businesses as a result of COVID-19.
The Oxford COVID-19 Government Response Tracker (OxCGRT) has been developed by researchers at the University of Oxford to track the various measures being implemented in around 150 countries presently, with many more countries likely to be added to the list being tracked. The data that is being tracked on an ongoing basis include: closure of schools, closure of workplaces, cancellation of public events, closure of public transport, public information campaigns, restrictions on internal movement, restrictions on international travel, fiscal measures, monetary measures, emergency investment in healthcare, investment in vaccines, testing policy and contact tracing.
Based on the data of the 13 indicators, the researchers have developed a Stringency Index, details of which can be found here. The index is meant to only allow for a comparison of the stringency of national government responses to the unfolding crisis in their respective countries, and is not aimed at capturing the effectiveness or appropriateness of measures that have been put in place. The index also does not ‘capture demographic or cultural characteristics’ that may have a bearing on the spread of the virus.
As of 22 April 2020, India had 15474 active COVID-19 cases, 3869 cured/ discharged cases and 640 deaths due to the novel coronavirus (for the latest numbers please visit the website of the Ministry of Health and Family Welfare). While the response in India had varied across state governments after the WHO declared COVID-19 a pandemic, there have been a series of measures announced by the Central government to mitigate the spread and impact of the coronavirus.
With a view to creating awareness and encouraging social distancing in India, Prime Minister Modi first announced that there would be a ‘Janta’ curfew on March 22nd. This was followed by another speech on March 24th in which the Prime Minister announced that from midnight onwards there would be nationwide lockdown that would last for three weeks.
In his speech on March 24th, the Prime Minister additionally announced that the government would spend Rs 15,000 Crores* on boosting the country’s health infrastructure as part of its fight against the coronavirus. The Finance Minister followed this up with an announcement on March 26th of a fiscal package totalling Rs 1.7 lakh** Crore (around 0.8 percent of GDP) that will target 800 million people through a doubling of their food grain ration as well as increase the supply of pulses over the next three months. In addition, there will also be direct cash transfers to the most vulnerable. The fiscal package also includes a Rs 50 lakh medical insurance cover for around 22 lakh health workers in government hospitals over the next three months. On April 14th, Prime Minister Modi announced an extension of the nationwide lockdown till May 3rd, and also said there was a possibility of opening up ‘select necessary activities’ in low-risk areas starting April 20th. The subsequent partial relaxation of the lockdown in low risk areas if any, have varied across states.
The Reserve Bank of India (RBI) too has stepped in with monetary measures. On March 27th, the RBI had advanced its policy review meeting by a week and cut the repo rate cut by 75 basis points to 4.40% on March 27th. The central bank had also reduced the reverse repo rate by 90 basis points to 4.00%, and had also announced a ‘COVID-19 – Regulatory Package’ in which it said it would encourage commercial banks to provide a moratorium for repayment of loans/ EMIs for a period of 3 months, for repayments that were likely to come in the period between 1 March, 2020 and 31 May, 2020. On April 17th, the RBI further reduced the reverse repo rate by 25 basis points to 3.75%.
To gauge the effectiveness of the measures announced thus far, and to understand if more would need to be done, more data and details would need to emerge about the spread and the impact of the virus. There is a clear and concerted effort on the part of individuals and the private sector to assist in the efforts to combat the virus. Effective communication and updates with respect to the implementation of the measures announced, coupled with timely data on multiple fronts (like number of ventilators required, availability of testing kits etc.) could help direct much of the efforts to support the health system where most needed and also support the most vulnerable segments of the population through this crisis.
*1 Crore = 10,000,000
**1 Lakh = 100,000