India has laid out plans for the gradual reopening of its economy, which will permit some manufacturing, agricultural work and other activities to resume on a limited basis after April 20, provided they are not in designated coronavirus hotspots.
But the country’s lockdown — imposed on March 24 with little warning and since extended until May 3 — will remain one of the strictest in the world, with all domestic and international flights, trains, buses, metros, taxi services, rickshaws and other public transport services still suspended.
India has reported 11,438 cases of coronavirus, and 377 deaths. However, many doctors believe the country is severely under-testing and that many deaths from the pathogen have gone unrecognised, and uncounted.
In a lengthy document released on Wednesday, Prime Minister Narendra Modi’s government outlined measures that attempted to balance controls on public movement with the need to revive an economy that had ground to a halt.
“India is essentially debating between epidemiological gain versus economic pain,” said Aurodeep Nandi, an economist at Nomura, which forecast that India’s economy will shrink 0.5 per cent this year as a result of coronavirus.
“While the aim is to nudge the economy from lockdown atrophy, the opening will ultimately be on a wing and a prayer that the number of cases does not escalate as India makes its way back to work,” he said.
India’s schools and educational institutes will stay closed, as will any public spaces such as religious sites, malls, cinema halls, sports facilities, and most hotels — unless they are providing emergency shelter. Gatherings such as weddings, or other religious or social functions remain banned.
The popular Indian Premier League cricket tournament, which was due to start on Wednesday, has been “indefinitely postponed”, given the restrictions on public gatherings.
However, some activities intended to help ease the plight of India’s poorest and most vulnerable, whose incomes have collapsed, and to ensure the continuity of essential services will be allowed to resume.
Ports — clogged with uncollected goods and unloaded containers — can resume operations. Rural manufacturing units and factories in designated industrial areas can also operate, as long as employers provide accommodation for workers on site, or in nearby buildings.
Construction can resume, using labourers who have been trapped at building sites since the lockdown began, although no additional workers can be brought in to work.
Agricultural activities — which account for just 15 per cent of India’s GDP but still employ nearly half of the country’s workforce — will be permitted, including the opening of agricultural supply shops, and all kinds of agricultural processing units. Self-employed car mechanics, electricians, plumbers and other repair people will also be permitted to resume work, except in designated coronavirus hotspots.
Shilan Shah, India economist at Capital Economics, said the relaxation measures were unlikely to have any meaningful impact on India’s growth prospects for the year. But he said they would help alleviate the humanitarian crisis as people struggle to find money to buy food.
“We don’t think it’s going to have a major impact on growth,” Mr Shah said. “There are still enormous parts of the economy that are going to remain closed. We’re more positive on the long-term humanitarian benefits of this.”
Investors were initially upbeat about the economic plan, sending the Bombay Stock Exchange Sensex benchmark up as much as 2.7 per cent in morning trading. But by Wednesday afternoon, the market gave up its gains and at its close was down nearly 1 per cent.
Additional reporting by Benjamin Parkin