Lockdown saved more than 100,000 lives claims Economic Survey

Covid-19 has been effectively controlled as of January 15, while the economy is on a V-shaped recovery, as India’s strategy of imposing a stringent lockdown in the early phase of the pandemic has succeeded, claims the Economic Survey.

Vigorously defending the March 2020 lockdown, which has been a subject of much debate and controversy, the opening chapter— Saving lives and livelihoods amidst a once-in-a-century crisis—of the Survey says India recognised that while GDP growth will recover from the temporary shock caused by the pandemic, human lives that are lost cannot be brought back. Policymakers drew lessons from the Spanish Flu, Nobel Prize-winning research and the Indian epic Mahabharata as they bet that a quick, intense lockdown would later drive economic growth and employment.

According to the Survey, stringent lockdown strategy restricted the Covid-19 spread by 3.7 million cases and saved more than 100,000 lives.


‘India Reaping Lockdown Dividend’
Uttar Pradesh, Gujarat and Bihar restricted the case spread the best; Kerala, Telangana and Andhra Pradesh saved the most lives; Maharashtra under-performed the most in restricting the spread of cases and in saving lives.

By constructing a ‘stringency index’, the Survey claims that under and over performance in cases and deaths across states correlates strongly with the stringency of the lockdown. It seeks to dispute the contention that factors peculiar to India such as immunity levels, BCG vaccination have played a role in influencing the course of the pandemic in the country.

It categorically states that the lockdown had a causal impact on saving lives and the economic recovery, and points out that it was responsible for pushing the peak of the pandemic to September 2020. After this peak, India has been unique in experiencing declining daily cases despite increasing mobility, it said.

“Indian policymakers, backed by evidence, recognised that the lockdown would adversely impact economic activity and disrupt livelihoods,” the Survey said. The government used the crisis to boldly implement long-pending reforms to propel economic growth. As a result, India is witnessing a V-shaped recovery with a stable macroeconomic situation aided by a stable currency, comfortable current account, burgeoning forex reserves, and encouraging signs in the manufacturing sector output.

“India is reaping the ‘lockdown dividend’ from the brave, preventive measures adopted at the onset of the pandemic, which were based on the humane principle advocated eloquently in the Mahabharata that ‘Saving a life that is in jeopardy is the origin of dharma’, the Survey said.

The Indian strategy was also motivated by the Nobel-Prize winning American economists Lars Peter Hansen and Thomas Sargent’s 2001 paper ‘Robust control and model uncertainty’ recommending a policy focused on minimising losses in a worst case scenario when uncertainty is very high.

To assess the effectiveness of the policy response the Survey estimated, based on the population, population density, the demographics of the population and the number of tests conducted, what might have been the caseload and deaths in the absence of the policies adopted. Applying the case fatality rate of the worst affected countries to India, the Survey model calculated the country prevented over one lakh possible deaths.