COVID- 19 and Economic Loss of First Phase of (21- Day) Lockdown in India

Tiken Das,Diganta Das

doi:10.20896/saci.v8i1.844

Abstract

To curb Covid-19 spread, Prime Minister Narendra Modi has announced a 21-day nationwide lockdown on 23 March 2020. The present study makes an attempt to estimate the state-wise and economic activity-wise economic loss of 21- day lockdown in India. The data on Net State Value Added (NSVA) by economic activity was collected for five years from the Reserve Bank of India. It was found that the percentage of the daily loss of Net State Value Added (NSVA) was considerably higher for the states of Chandigarh, Delhi and Karnataka. The manufacturing sector was expected to be the highest loser, followed by real estate, ownership of dwelling and professional services. In absolute terms, the loss was prominent in Maharashtra, Tamil Nadu and Karnataka. It is worth mentioning here that what could be the magnitude of the impact of a complete social and economic shutdown may not be easy to estimate, but it is likely to be far more severe.

Highlights

Coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (World Health Organization, 2020)
Prime Minister Narendra Modi has announced a 21-day nationwide lockdown on 23rd March 2020 to prevent the spread of COVID-19, since social distancing has proven to be one of the most effective tools in curbing its spread
The daily loss of Net State Value Added (NSVA) is considerably higher for the states of Chandigarh, Delhi and Karnataka

Summary

Introduction

Coronavirus disease 2019 (COVID-19) is an infectious disease caused by severe acute respiratory syndrome coronavirus 2 (World Health Organization, 2020). Along with the growth hit and poor tax collections, the fiscal deficit for 2021 to balloon by over 1% of GDP (Wadhwa, 2020). Many warn it may result in a significant number of people dying due to hunger and poverty arising out of the economic impact of the lockdown (Bhasin, 2020). The small-scale sector has suffered more than the large-scale sector, as these businesses work with a limited amount of working capital and, as their sales have declined, they will exhaust it (Kumar, 2020) Within these contexts, the present study attempts to estimate the state-wise and economic activity-wise economic loss of 21- day lockdown in India.

Data Source and Strategy for Quantifying Loss

Grand Total

Findings

Conclusion