It was expected that the Economic Survey 2019-20 would have a special section on COVID-19, the virus that has battered the economy hard. Released yesterday, the survey highlights most of what has already been heard and analyzed in terms of COVID-19’s economic impact. As a result of COVID-19, contraction in GDP is set to decline in manufacturing and the services sector, which particularly included the wholesale and trade with these sectors witnessing negative growth as against positive forecast before the pandemic.
The section talks about the socio-economic impact of the virus which puts 44 percent of the employed labor force or 27.3 million informal workers at most risk of losing livelihoods to the COVID crisis. The sectors most vulnerable where these informal works are employed are the wholesale and retail trade (33 percent) and manufacturing (23 percent). Layoffs between 12.5 million to 15.5 million in case of moderate slowdown in economic activity/ partial lockdown and between 18.7 to 19.1 million in case of severe restrictions on economic activity/ full lockdown were already shared earlier by PIDE, the think-tank of the Planning Commission.
Similarly, the impact on SMEs, the situation of hospital beds and PPE has also been discussed much more broadly elsewhere. However, what is new is the gender inequality angle with which much of the socioeconomic impact is discussed. It is stated clearly in the survey that women and children, especially those from more disadvantaged households and those who are home-based workers, will be among the most impacted. This not only includes the economic impact of layoffs in the informal sector (where women have most employment) but also the health and nutrition effects.
The impact on reproductive health care due to potential shortages of required medications; diversion of health care providers to COVID-19 patients; and the cut in financial resources due to COVID-19 response are likely to have long term repercussions. Similarly, girls and women are among those who will lose the most due to disruption in educational activities. COVID-19 has directly impacted 42 million school going learners from pre-primary and primary to higher secondary and degree college levels, and unfortunately women are twice as likely to be taken out of school in crisis situations. Even in nutrition, women and children stand to lose the most in case of a food security situation.
In its analysis of the COVID-19 response and recovery, the survey points to the provision of the opportunity by the crisis to reassess development priorities like diversifying trade, trading partners, and foreign investment. But does it always have to take a crisis to rearrange priorities? The section has devotedly been advocating diversification in the two for long.