Mobility already down, no need for a national lockdown: Experts point to curbs imposed by states

A national level lockdown is not needed right now as there has already been a sharp decline in mobility due to restrictions imposed by various states, economists said as they pared growth estimates for FY22.

Most parts of the country are already under some sort of lockdown, restricting mobility in several states. Cases could decline in about a week’s time, they expect. Mobility levels currently are in line with those in May-June 2020.

"The positive takeaway is that almost all states have managed to contain the mobility of people by imposing lockdowns and hence it also shows that a national lockdown per se was not required as the same was being done by the states with their localised restrictions,” CARE Ratings said in a report.


Some States Expected to Peak in May
Analysing mobility data in the 10 largest caseload countries, the CARE report said India had probably seen the sharpest decline due to the restrictions. Maharashtra, Tamil Nadu, Karnataka, Delhi, Haryana, Uttarakhand, Punjab and Kerala among others have imposed lockdowns as cases have increased.

Mobility has fallen across states uniformly, the report said.

"At this juncture, a national-level lockdown is not needed," said Soumya Kanti Ghosh, group chief economic advisor, State Bank of India. "Twenty states are already in some form of lockdown. Cases should ideally come down in a week."

Some political parties and business lobby groups have called for a national lockdown to contain the pandemic.

HDFC Bank chief economist Abheek Barua isn’t in favour of such a broad shutdown. "The current strategy of going state by state as per positivity rate or case load is better," said Barua. "However, most states do not have the capacity to do small or micro containments effectively."

India added more than 400,000 cases daily on May 5-8 before the usual weekend decline to 366,000 cases on Sunday.

"Mobility is already responding to the state-level lockdowns and has reduced to levels last seen in June 2020, when the country was slowly emerging from the stringent nationwide lockdown," said Vivek Kumar, economist at QuantEco Research.

Economists expect some states to peak in May and, with Maharashtra showing a drop in cases, the trend could be followed by other states in the next three-four weeks.

ECONOMIC IMPACT
The drop in mobility implies that economic activity will be dented, CARE Ratings said.

If the localised restrictions continue for another month, Kotak Mahindra Bank’s 10% gross domestic product estimate for FY22 could be reduced to 8-8.5%.

"While many states are showing signs of peaking, if the restrictions continue till June-end, there could be a 100-150 basis points downside risk to our projections," said the bank’s economist Upasna Bhardwaj.

In a report released on Sunday, rating agency CRISIL said its 11% growth forecast for FY22 faces a downside risk. If the second wave peaks by May-end, FY22 growth could drop to 9.8% and more sharply to 8.2% if it happens only by June-end.

"Assuming the second wave to peak in May with most of restrictions remaining until June, the economy is likely to take a hit with FY22 GDP growth now estimated by us at 10% vis-a-vis 11.5% earlier," Kumar said.