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Implications of Pandemic & Consequent Economic Crisis: What to Do About It

30-Mar-2020Arvind Virmani

Questions from Asit Ranjan Mishra, Senior Editor, Mint

Q1: How do you assess the economic fallout of Covid-19 outbreak on Indian economy?

A1: There is an unprecedented shock to every economy in the World, including the Indian economy. There are three aspects. One the Lock-down, which is unprecedented even when compared to that in the key economies involved World War 2. It practically immobilizes the work force and thus reduces production to zero in 80-90% of economy. The #Lock-down in China, the first globally, were also an unprecedented disruption of production-inputs, the supply of intermediate goods, given China's role in so many critical Global supply chains and its monopolization of so many products. The contagion fear before the lock down, which will remain after the lock down, constitutes a huge demand shock for contact services which involve dense collections of people like air, rail & bus transport, Tourism, Restaurants & Hotels, Entertainment, Malls & retail markets.

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