India reported 370,000 Covid-19 infections on Monday, after hitting a world record of over 400,000 on Saturday. It has recorded 3,500 deaths a day, although experts believe the true toll is much higher as the outbreak of cases has overwhelmed health systems and exposed critical shortages of vital infrastructure, such as oxygen supplies. , hospital beds and testing capacity.
Large parts of the country have already been stranded, including India’s three largest cities, New Delhi, Mumbai and Bangalore. Prime Minister Narendra Modi’s government, however, halted ahead of the comprehensive lockdown it put in place last year, wary of the ruinous consequences for an economy still reeling from the shock.
Uday Kotak, chairman of Confederation of Indian Industry and managing director of private lender Kotak Mahindra Bank, said the government should look to “the maximum nationwide response measure at the highest level.”
“We have to cut back on economic activity and non-essential services for a very short time to break the chain. Essential services like oxygen, drug and food supplies must continue, ”Kotak said.
Kotak, India’s richest banker, said the government should use the time bought with a lockdown to bolster the country’s medical capacity by building field hospitals, expanding testing and distributing more vaccines.
The second wave of the coronavirus was so severe that many businesses had to shut down or downsize because of industrial oxygen shortages or because many of their employees or families were sick.
“There are areas of the country, including Delhi, where people do nothing other than keep people safe or try to cure them,” said Naushad Forbes, co-chairman of engineering firm Forbes Marshall and former president of the CII. “There is no economically productive work. “
Modi’s government is increasingly sensitive to criticism, including from the business community, which has been a stronghold of support for his administration.
The government has been accused of failing to prepare for the second wave, leaving health systems at risk when cases exploded in March. Critics said Modi’s Bharatiya Janata party instead focused on an aggressive – and ultimately unsuccessful – election campaign in West Bengal.
The Indian Premier League cricket tournament, which has been criticized for continuing to play through the second wave, postponed a game on Monday after two players tested positive despite strong biosecurity measures.
Some experts felt the sharp rise in cases was exacerbated by variants of the virus, including the B.1.1.7 strain first detected in the UK and another variant identified in India.
The country also faces a shortage of vaccines. Adar Poonawalla, managing director of the Serum Institute of India, told the Financial Times that the country’s severe vaccine shortage will continue until the end of July, when he would be able to ramp up production.
The second wave and a possible renewal of the lockdown threaten to derail what was to be a robust recovery in India’s economy, which the IMF said shrank by 8% in 2020.
Economists had predicted a double-digit rebound this year before the latest wave, which led to sharp declines in consumer activity.
While this year’s more nuanced local restrictions allowed manufacturers and logistics companies to operate, companies said it did little to help them when large parts of their workforce were sick or caring for their relatives.
As Indian consumer demand rebounded rapidly last year following the easing of restrictions, businesses have warned that weathering the latest shock would likely take much longer.
“This crisis is deeper, much more acute and people will react to it differently,” said Gaurav Dalmia, chairman of Dalmia Group Holdings, which has interests in financial services, real estate and industry.
“The fear in the minds of business leaders, citizens, consumers – whatever hat I wear – will be much greater,” Dalmia added. “It’s not just a statistic anymore. We actually know people who had Covid. The rebound will be much slower. “