The Covid-19 Shock and the Indian Economy – A Cross-Country Comparative Analysis

To understand the economic and public health impact of the Covid-19 pandemic on India, we take a comparative cross-country perspective as all countries were exposed to this shock and were negatively affected and so, a relative comparison allows us to better assess India’s performance in these dimensions. We carry out three sets of exercises. First, we discuss the economic impact of Covid-19 using key macroeconomic indicators – gross domestic product and employment. Second, we review the fiscal policy response of the government and use household and individual-level surveys to understand the heterogenous impacts of the pandemic on households in the country. Finally, we compare public health indicators across countries. The analysis suggests that India’s record with respect to other countries, including countries that are comparable in economic status, puts it in the lower tail of the distribution – both in terms of economic and public health indicators. The fallout on the poorer sections and informal sector was particularly severe and policies to mitigate this were inadequate. We conclude that going forward, improving the public health infrastructure and the social safety net must be the public policy priority for the government.