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Why next-generation economic reforms are crucial for reviving investment
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Macroeconomics
Covid-19: Consequences for state finances
When Covid-19 pandemic started in India, given that health is a state subject, individual states reacted as best they could under state-level legislations. However, as more than 60% of all economic activity was shut down with the announcement of a nation-wide lockdown on 24 March, the result was a sudden and sharp drop in states’ own taxes at the time when their expenses shot up. In this post, Pronab Sen discusses how state finances have been dealt a devastating blow.
How costly are flawed government responses to Covid-19? An assessment of the migrant crisis
By March-end, countless migrant workers started fleeing India’s locked-up cities and trekking home to their villages amidst the Covid-19 crisis. Sarmistha Pal argues that government’s responses until now not only failed to cater to migrant workers’ needs, but also remain largely ineffectual in solving the cash constraints of their employers. These responses are costly as they are likely to give rise to more hunger and starvation, deaths, loss of productivity, firm closure, and ultimately mass unemployment.
Covid-19: Expected migrant movement as lockdown eases
Since the lockdown was announced in India, many migrants have undertaken the difficult journey to their place of origin. However, millions of them are still in cities, and some are expected to return home when the lockdown is lifted. Using past data on seasonal and permanent migration, Imbert shows that they will mostly come from a few manufacturing clusters where Covid-19 prevalence is high, and return to poor rural areas where healthcare capacity is low.
Is Covid-19 equally deadly across all states?
International experience suggests that the rates of fatality on account of Covid-19 vary across the world. In this post, Jain and Chatterjee seek to estimate the fatality rate of the pandemic in India, and the extent of spatial variation across states. They find that the overall ‘Case Fatality Ratio’ – ratio of deaths to cases – is around 13-15%, and states such as Maharashtra, Gujarat, and Madhya Pradesh record higher values than other states.
15th Finance Commission: Covid-19 warrants rethink of local government allocations
The 15th Finance Commission has made significant departures from the previous Central Finance Commissions in its recommendations for urban local governments, in its interim report for 2020-21. In this post, Mehta and Mehta highlight these and provide some suggestions for consideration in the final report, especially with regard to increasing allocation for sanitation, and making available more untied funds for urban local governments to enable them to meet exigencies of Covid-19-like situations.
Covid-19: Ashok Kotwal speaks with Pronab Sen
In conversation with Ashok Kotwal on the ongoing economic crisis caused by lockdown to mitigate Covid-19 spread, Pronab Sen breaks down the problem into survival of individuals and livelihoods, and the survival of enterprises and the productive capacity of the economy. He contends that if enough is not done for the latter, the former will become very difficult to manage – once the pandemic begins to recede.
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