Contextualizing the COVID Pandemic in India

This chapter examines the macroeconomic developments covering the recession and recovery in India during Covid-19. It begins with a brief introduction of the global environment since the outbreak of Covid-19 and the spread of the pandemic during March 2020 to March 2023. It discusses the closure of production units following the lockdown and the government’s policy response to ameliorate the adverse effects. It examines the macroeconomic developments during fiscal 2020–21, the year of recession when GDP witnessed an absolute fall by 5.7%. It documents the impact of recession on sectoral value added, unemployment, consumption, investment, fiscal and trade parameters during the recession. It also briefly describes the movements of these variables during 2021–22, the year of recovery and 2022–23, the year of global conflict. Next, the chapter makes an assessment of the policy measures and the likely impact of recession on different income groups and incidence of poverty. It hints at reorienting certain macroeconomic and human development policies to equip the economy and the people to meet a pandemic like situation in future.

There is now a considerable volume of literature that points to the primacy of primary health care in dealing with pandemics and epidemics. The paper discusses the centrality of primary health care in pandemic preparedness by giving the example of India. It starts by attempting to understand the debate around excess deaths during the COVID-19 pandemic and the possible reasons for this to make the point that it is possible that India saw a greater impact of the pandemic than is officially believed. It elaborates on the current gaps in the existing primary care from four angles: health financing, the capacity of the primary health care system which includes infrastructure and personnel, performance in terms of health outcomes, and equity in terms of access, affordability, and availability of primary care. In this context, the paper looks at the extent of prioritization of the health sector in the three years after COVID-19 started by looking at budget allocations. It concludes that unless the health sector is urgently prioritized in government spending, it is unlikely that the state of primary care will improve anytime soon, with a concomitant impact not only on health outcomes and equity during normal times, but aggravated impact from future pandemics and epidemics.

By collecting primary data through phone interviews during October 2020 through January 2021, from a sample of more than 1600 households in seven districts of rural Bihar, this study documents the living experience of these households during and following the first wave of the Covid-19 pandemic since March 2020. It focuses on the impacts of the pandemic on different sources of livelihood; select impacts on health, nutrition and education; and the extent of government support received by households. Detailed evidence from the study paints a picture of pervasive and severe impacts where virtually no household or source of livelihood was spared, though with some differentiation by social group and income class. The evidence also points to the meagre level of government support received by households. Many received only a fraction of the promised support at a time when existing safety nets were also compromised to a lesser or greater extent.

This research looks at the economic well-being of households across social categories in India before and during the COVID-19 pandemic. Nearly all households saw significant spending reductions during the pandemic, resulting in a leftward shift in the distribution of monthly per capita household expenditure (MPCHE) in 2020 compared to that in 2017. We document that even prior to the epidemic, the percentage change in the MPCHE slowed down, leaving the Indian economy more vulnerable. This slowdown was more pronounced particularly among urban families, who had seen a drop in spending prior to the pandemic. The economic shock that came in the wake of the COVID-19 pandemic further compounded this problem. Indeed in 2020, the MPCHE fell by 27% in urban households and 20% in rural households, while poverty rose by 19 and 14 percentage points in urban and rural households, respectively. In this paper, we focus on the urban households, which were disproportionately impacted by the pandemic, and evaluate the impact by two social groups—caste and religion. Our findings show that the socially disadvantaged groups, who were already at the bottom of the economic ladder in the pre-pandemic period, have been significantly impacted. SC/STs, Muslims, and Hindu-SC/STs had the highest increase in poverty rates as compared to Hindu-UCs, Sikhs, and Christians. Our results indicate that the pandemic has deepened already-existing economic disparities between socio-economic groups.

This article briefly reviews the devastating impact of the COVID-19 on the education sector in India. Focusing on school education, it also critically examines how effective online learning, the only major way adopted during the pandemic, has been in the delivery of education and whether it is a reliable alternative method of teaching and learning in India. It also briefly outlines a few important strategies required for the recovery of loss incurred and to face emerging challenges in education in India.

With the evolution of Covid-19 since its emergence in 2020, the pandemic has had multiple economic effects—effects which manifest as immediate shocks—but also as scarring effects having long-term repercussions. Certain demographics may be more exposed or vulnerable to these long- and short-term impacts. This chapter focuses on young workers who entered the Indian labor market for the first time during the pandemic. Using all-India CMIE-CPHS data, we track a panel of both the young workers, and the young entrants to examine this. Our findings reveal that even though there is only a marginal difference in the likelihoods of finding employment when comparing between the pandemic and the pre-pandemic entrants, the pandemic entrants face a greater disadvantage in the intensive margin in terms of the type of employment. There was a rise (drop) in the more precarious forms of employment like daily wage (permanent salaried) for the pandemic entrants as compared to their pre-pandemic counterparts. Further, they suffer disproportionately in terms of the associated earnings from this employment. The pandemic entrants made 60% lower monthly income than the pre-pandemic entrants in 2019. Even by 2022, the temporary salaried workers among the pandemic entrants continued to make 4% lower income as compared to the starting income of their pre-pandemic counterparts.

India imposed one of the strictest lockdowns to contain COVID-19, this brought all non-essential economic activities to a standstill. This was an unprecedented economic and health shock that affected the entire population, but the worst affected were the informal migrant workers who lived hand to mouth. Millions of them fled back to their native places seeking refuge from the economic uncertainties created by the sudden lockdown. However, this reverse migration resulted in an increased burden on rural economies in multiple ways. This chapter discusses the role played by rural social protection policies, particularly the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Garib Kalyan Rojgar Abhiyaan (GKRA), in easing the burden on the labor market, with a focus on the provisions of these schemes on female labor force participation.

Examining high-frequency national-level panel data from Center for Monitoring Indian Economy (CMIE) on paid work (employment) and unpaid work (time spent on domestic work), this paper examines the effects of the first wave of the Covid-19 pandemic on the gender gaps in paid and unpaid work until December 2020, using difference-in-differences (DID) for estimating the before (the pandemic) and after (the pandemic set in) effects, and event study estimates around the strict national lockdown in April 2020. The DID estimates reveal a lowering of the gender gap in employment probabilities which occurs due to the lower probability of male employment, rather than an increase in female employment. The first month of the national lockdown, April 2020, saw a large contraction in employment for both men and women, where more men lost jobs in absolute terms. Between April and August 2020, male employment recovered steadily as the economy unlocked. The event study estimates show that in August 2020, for women, the likelihood of being employed was 9 percentage points lower than that for men, compared to April 2019, conditional on previous employment. However, by December 2020, gender gaps in employment were at the December 2019 levels. The burden of domestic chores worsened for women during the pandemic. Men spent more time on housework in April 2020 relative to December 2019, but by December 2020, the average male hours had declined to below the pre-pandemic levels, whereas women’s average hours increased sharply. Time spent with friends fell sharply between December 2019 and April 2020, with a larger decline in the case of women. The hours spent with friends recovered in August 2020, to again decline by December 2020 to roughly one-third of the pre-pandemic levels. The paper adopts an intersectional lens to examine how these trends vary by social group identity.

Women bore the disproportionate impact of the pandemic-induced labor market disruptions throughout all three major waves in India. High-frequency monthly data reveals that around 37.1% of women lost their jobs in March–April 2020, compared to only 27.7% of men, following the national lockdown. Accounting for 73% of all job losses, women suffered a higher proportion and a higher number of absolute job losses in April 2021. Finally, in April 2022, even as male employment crossed pre-pandemic levels, women’s employment continued to lag, being 2% lower than in April 2019. Chronicling women’s lived experiences through over 100 primary consultations undertaken between 2020 and 2022, this paper describes the socio-economic factors behind the observed gender gaps in income and job losses. The gendered digital divide, domestic work responsibilities, mobility restrictions, inadequate skill training, and lack of institutional support amidst hybrid work emerge as key issues restricting women’s economic participation. To mitigate these challenges, gender-sensitive interventions need to be mainstreamed across the public, private, and social sectors. By highlighting the depth of the difficulties faced by women throughout the pandemic, this chapter posits the need to keep women at the heart of India’s post-COVID-19 recovery strategy.

After the initial couple of months of the nation-wide lockdown, it became evident that mobility restrictions cannot be the way forward to manage the pandemic as it was impacting people’s livelihoods. India did not merely see vaccination as a health response but realized its importance for opening up the economy in a safe manner. An effective rollout of vaccinations against COVID-19 was thought to be the most promising prospect of relaxing COVID-related restrictions, getting back to normalcy and perhaps bringing an end to the pandemic. We track vaccination coverage across states and over time in 2021 when the severity of the disease was the maximum. We focus on inequality in coverage and compliance with two doses of vaccination across states and gender. We also present evidence on potential bottlenecks such as vaccine hesitancy and supply shortages across states and over time and how that might be related to sub-optimal coverage in certain areas and specific time points.

While vaccine hesitancy has been a large part of the COVID-19 vaccination discourse in India, there is a significant lack of empirical evidence about hesitancy in rural India. To bridge this gap, we conducted a quasi-representative, in-person survey spanning 32 districts across rural Uttar Pradesh and Bihar in India to comprehensively characterize the barriers to vaccination and understand the attitudes towards the COVID-19 vaccine. We surveyed 6319 adults during April and May of 2022, of which 36% were unvaccinated, 33% were partially vaccinated, and 31% were fully vaccinated. Overall, there was a high intention to get vaccinated among the unvaccinated, with only 20% saying they would never get a vaccine for COVID. We use probit models to estimate the relationships between demographic variables and being vaccinated and the associations between stated barriers and vaccination status. The primary barriers were pregnancy and breastfeeding, and pre-existing medical conditions. The unvaccinated had lower vaccine-related knowledge, more misinformation, and less vaccine-related trust in medical professionals but assigned similar importance to COVID-appropriate behaviors. We also establish a high intention to vaccinate children against COVID, although it varies among adult vaccination statuses, with unvaccinated parents being the least willing to vaccinate their children.

This paper assesses the impact of the spread of COVID-19 and the lockdown on wholesale prices and quantities traded in agricultural markets. We compare whether these impacts differ across non-perishable (wheat) and perishable commodities (tomato and onions), and the extent to which any adverse impacts are mitigated by the adoption of a greater number of agricultural market reform measures. We use a granular data set comprising daily observations for three months from nearly 1000 markets across five states and use a double- and triple-difference estimation strategy. Expectedly, our results differ by type of commodity and period of analysis. While all prices spiked initially in April, they recovered relatively quickly, underscoring the importance of time duration for analysis. Wheat prices were anchored in large part by the minimum support price, while tomato prices were lower in some months. Supply constraints began easing in May with greater market arrivals perhaps reflecting distress sales. Market reform measures did help in insulating farmers from lower prices, but these effects are salient for the perishable goods, and not so much for wheat where the government remained the dominant market player. Taken together, these results point to considerable resilience in agricultural markets in dealing with the COVID-19 shock, buffered by adequate policy support.

In this paper we study the impact of the Covid-19 pandemic on the financial sector of the Indian economy, specifically on the banking sector, the non-banking finance companies (NBFCs) and the bond market, for the period March 2020 to March 2022. In order to set the context, we first summarise the conditions of the financial sector in the pre-pandemic period. We highlight the long-term structural trends and their underlying drivers that were conspicuous in this sector even before the pandemic. These issues have direct consequences for the manner in which the pandemic impacted the financial sector which is what we discuss next. Finally, we describe the way forward for the Indian credit landscape in terms of the major opportunities and challenges.

This paper examines the importance of mutual confidence or trust between a government and its citizens on the effectiveness of public policies. We develop a theoretical framework where the designing of government policies and the concomitant actions of the citizens are meditated by the degree of social trust. We introduce a short-term aggregative health shock—a pandemic—which is novel: its characteristics are not fully known at the onset. This creates scope for government intervention in the form of framing the policy announcement and its information content. We use this framework to examine the relationship between government communication, social trust and compliance. For any given level of trust, we analyse the equilibrium framing of the policy as well as the corresponding response and examine the degree of policy effectiveness as a function of the existing level of trust.