Pandemic in the Eyes of the World Bank and the IMF

Two reports released by two multilateral organisations, namely the World Bank and the International Monetary Fund (IMF), in October are a damning indictment of the government’s handling of the COVID-19 pandemic and its devasting consequence for the economy. The first report by the World Bank titled “Beaten or Broken? Informality and COVID-19” highlights how India’s record on the COVID-19 front is lagging sharply behind seven other countries in South Asia on several counts, rebuffing the tall claims made by the government.

The impact of the complete lockdown and travel restrictions, one of the strictest in the world, was devastating both for human beings as well as the economy. Electricity consumption went down to 30% below normal by end March and has remained below normal till August, indicating the severity of the lockdown. The decline in both mobility and light intensity in India was the highest in districts with the most COVID-19 infections per capita. And, while mobility declined between 20% and 30% in a third of the districts, it fell between 30% and 35% in another half of the districts, and even more than that in the remaining 15% of the districts. To make things worse, India’s 23.9% fall in the gross domestic product (GDP) in April–June 2020 was more than double the average 11.6% decline in GDP in 60 countries publishing quarterly GDP numbers. The decline in economic activity in India was only matched by Peru, which had one of the highest per capita COVID-19 infection cases in the world. Overall, India’s GDP is expected to contract by 9.6% in 2020–21, says the report.