Raghuram Rajan: Lockdown may not be effective at containing spread of COVID-19

Just keeping people at home may not contain virus’ spread, says former RBI governor

Raghuram-Rajan-sanjoy (File) Raghuram Rajan

Former RBI governor Raghuram Rajan has warned that the three-week nationwide lockdown in India will not necessarily contain the spread of the coronavirus.

Speaking to Bloomberg, he said that not only does the lockdown keep people from going to work, it also keeps them at home “which is not necessarily that pristine isolated place, but can also be a slum where people live together”, calling this a “very serious concern”.

He said that “it may be hard to prevent infections from spreading” adding that weak infrastructure could make transferring money, food and supplies to the poor difficult.

India on Thursday announced a 1.7 lakh crore ($22.7 billion) relief package in a bid to relieve the poor of the economic impacts of the coronavirus-induced shutdown. The package includes rations, food, and direct benefit transfers.

India’s lockdown is currently the world’s largest, resulting in shops and businesses being closed (except for essential services) and trains, buses and cabs not plying in the majority of the country.

Deutsche Bank’s Chief India Economist Kaushik Das told The Economic Times that India’s real GDP growth would drop to 1.5-2 per cent in FY21 as a result of the lockdown.  

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