How the Lockdown extension can affect the economy?

The debate between lives and livelihood continues while India battles COVID 19 pandemic with an extended lockdown. While the reports from various sources indicate partial ease on this month-long lockdown on May 3rd, the question also remains will the government take this crucial step for the sake of nations falling GDP rate or will give priority to health?

Through the reports, there have been mentions about government being more lenient with the new guidelines that need to get issued for the lockdown, but still, a definite exit plan is yet to be declared. According to the economic survey, almost 94% of people in India belong to the unorganized sector, which means if these people do not work, they won’t be able to sustain. This has given rise to a make or break situation for the government amidst the lockdown.

For India, the pandemic lockdown has turned into a human tragedy. India is a nation with agriculture as its backbone, while 85% of people work on farms, this lockdown has made the harvest season a significant downfall for the market.

Rathin Ray, an Indian economist, said, “Realistically, a complete lockdown cannot be continuously maintained beyond early may. We don’t have a choice but to reopen gradually after that.”

According to Dr. Gabriel Leung, an epidemiologist and dean of medicines at the University of Hong Kong, say India is yet to enter “several rounds of suppressing and lift cycles.” He has also mentioned that “restrictions are applied and relaxed, applied again, and relaxed again, in ways that can keep the pandemic under control but at an acceptable economic and social cost.”

According to economic times survey,

34-day lockdown results in 10.2 to 13. 6 lakhs crore GDP loss

Lockdown beyond 40 days could lead to GDP contraction

Income loss of 10.000 crores a day for 37.3 crore workers

43% of MSMEs face closure if lockdown goes beyond 8 weeks

Maharashtra has given 15% GDP contribution, Tamil Nadu 8.5% Delhi 4%, Telangana 4.5% Rajasthan 4.9% and UP 8%

After looking at the state of finances, the GST collection has dropped completely.

Narayana Murthy, the founder of Infosys, said, “What is important for us to understand is that India cannot continue in this situation for too long. Because at some point in time, deaths due to hunger will far outweigh deaths due to coronavirus.”

He suggests that the country should now accept the pandemic COVID 19 as the “New Normal.” Even the former president of RBI, Raghuram Rajan, marked that India cannot withhold the devasting pressure of an economy in the second or third round of lockdown.

While India gambles with the game of lockdown to save millions, a three-phase relaxation is required for the benefit of economy and health.

The above chart represents the SENSEX of the Indian stock market between 27th January 2020 to 30th April 2020. After the market got hit with COVID 19 pandemic, a markable fall can be seen.

With the recent deal between Facebook and Jio enterprises, the rate leaped faith with a 5.7 billion dollars deal, but still, it is far away from reaching its prime goal. BPL people and workers have bled most during this lockdown and have asked the government to provide some liquidity to the scenario. Even experts feel that another lockdown extension by the government can wipe out smaller businesses leaving many unemployed.

After getting all the facts clear, the conclusion is simple; the ruling government needs to come out with supportive measures for the falling economy, making the country’s debt pool heavier. It is a make or break situation for the nation, and to make sure the chances of survival for both economic and health, the government needs to change their plan. For further queries, check out our website or you can mail us in

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