Lockdown drives India into economic catastrophe: Prof Ghosh

New Delhi: Painting stark and dramatic picture of the damage the coronavirus lockdown will do to the economy, Professor of Economics at Jawaharlal Nehru University Prof Jayati Ghosh says, more damage has already after been done to the economy in two days of lockdown than by demonetization.

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In an interview to Karan Thapar for The Wire, Prof. Ghosh says growth for the last quarter of the year ending March 31, 2020 is already negative, she warns that the economy will shrink over the next three months.

Showing  concerns about vulnerable sections like daily wage workers and migrant labour trapped by the lockdown in large cities, Prof Ghosh pointed out that they are already facing hunger and have no or very little savings to support themselves.

Claiming that the lockdown will have disastrous economic consequences, Prof Ghosh says the millions of daily wage earners, if they do not earn a daily wage, they will not be able to eat.

Daily wage workers are already facing hunger and have no or very little savings to support themselves

Observing that the Central government seemed to be oblivious of this problem although some state governments, particularly Kerala and Delhi, have acted, she expresses fear that if the government does not immediately act to help, the situation will lead to social unrest and violence.

If the government does not immediately act to help, the situation will lead to social unrest and violence

Discussing in detail the damage the lockdown will cause to medium and small scale enterprises (MSMEs) and specific sectors like hospitality, tourism, aviation, railways, construction, agriculture and retail, Prof Ghosh said unemployment would leap in coming days.

Prof Ghosh recommended that the government must take ameliorative steps.

Noting that agriculture provides livelihood to 52 per cent of the people, Prof Ghosh predicts another agrarian crisis in the absence of an aid package.

Prof Ghosh predicts another agrarian crisis in the absence of an aid package

Saying that the measures taken right now are draconian and absolute, Prof Ghosh feels government needs to be more sensitive on how it imposes these measures. She adds that the Government must also assure depositors about the safety of their bank deposits.

The measures taken right now are draconian and absolute, government needs to be more sensitive on how it imposes these measures

Strongly criticising the Central government for its inaction, she said if it does not act soon and effectively, country will be in deep trouble.