Narendra Modi made a characteristically unexpected decision to impose a harsh lockdown on India’s 1.38bn people in late March. The prime minister must now reopen most of the economy. Doing this, while containing Covid-19, will be hard. The government also needs to spend. The health of both people and the economy has to come first.
The lockdown was extraordinarily severe. Only 6 per cent of India’s population is over 60, against 16 per cent in the US, 19 per cent in the UK and 23 per cent in Italy. A huge number of people toil in the informal economy: after the lockdown, over 140m migrant workers duly lost their jobs. With railways closed, vast numbers were stranded and forced to return home on foot.
While the confinement was sudden and brutal, the fiscal response has been a mere 1.1 per cent of gross domestic product. Inevitably, this meagre reaction, together with the difficulty of co-ordinating state and central government responses over this vast country, has left many Indians in hardship.