As the impact of coronavirus intensifies across the globe, India joins China, France, Italy, New Zealand, Poland, and the UK in a nationwide lockdown. The 21-day lockdown, which took effect on 25 March, came as the country saw the number of confirmed cases rise to 512. These measures include the closure of all non-essential businesses, schools, universities, and public gatherings, but hospitals and other medical facilities will remain open.
What events led up to this nationwide lockdown?
- The government puts 75 districts, which equates to 20% of India’s population under lockdown after the seventh death was recorded on 22 March
- Railways, metro stations and inter-state connectivity is suspended until 31 March 2020
- Domestic flights are ordered to stop operations indefinitely
- The budget session of the Parliament has been postponed indefinitely
- India Inc. is expecting a stimulus relief package from the central government this week.
- As the tourism industry takes a hit, renowned Indian business leader Anand Mahindra, CEO of Mahindra Group, with interests in automobile, tourism and tech sectors has voluntarily diversified his business to produce ventilators and is offering resorts as COVID-19 care facilities.
- The CBI in India is working with stakeholders including the British High Commission, Confederation of Indian Industry, and Invest India to assess the business impact of COVID-19 and feed into relevant Indian nodal agencies about challenges faced by British businesses in India.
19 March – 22 March
- India reports 200 confirmed cases of COVID-19 – with five deaths
- While the country is combating to contain the virus spread within Stage 2, Prime Minister Narendra Modi addresses the nation on March 19 by announcing the formation of a COVID-19 economic response task force to deal with the economic challenges
- The PM Modi also announces a voluntary 14-hour lockdown called ‘Janta Curfew’ on 22 March as a drill to prepare citizens for a further shutdown if the virus spreads into the community
- India suspends any international commercial passenger aircrafts to land from 22 March for one week
- PM Modi urges citizens to self-isolate and practice social distancing – especially senior citizens and children
- Indian Health Ministry invokes the Epidemic Diseases Act of 1897, temporarily giving it authority to take special measures and prescribe regulations for curtailing the effect of the pandemic
- The Internal Ministry of Home Affairs invokes the National Disaster Management Act of 2005 and allocates the State Disaster Response Fund to the states to mitigate the COVID-19 spread
- Maharashtra state government shuts down everything except essential services, while Haryana government mandates ‘work from home’ for firms. Meanwhile, Indian-railways decides to keep crowds away from stations with a five-fold hike in platform ticket prices.
The economic implications of coronavirus on India
- As the Indian rupee hits a record low rate of INR 75/$, the Reserve Bank of India (RBI) will conduct open market operations by purchasing more than £1bn (INR 10,000 crore) of government-backed securities to ease the pressure on the rupee
- Financial Markets in India recorded its worst fall as Sensex nosedived by 3900 points amidst the low business sentiment in lockdown and further outbreak fears
- The RBI has also issued operational and business continuity measures for financial institutions and banks
- Market regulator, SEBI (Securities and Exchange Board of India) has eased compliance requirements for listed companies including allowing an additional 45 days to file their Q4 results and a further month for annual results
- Rough estimates of the impact of COVID-19 on Indian tourism and the hospitality industry suggest a potential loss of 25% of jobs, while the aviation industry revenue loss is projected as £2.5bn (INR 22,700 crore)
- On 15 March, PM Modi took part in online summit with leaders of other South Asian countries to ensure continuous coordination between the respective health departments. India has offered $10m to set up an emergency fund
- The Finance Ministry has announced that corporate spending to tackle the economic fallout including promotion of health care, preventive healthcare, sanitation would be eligible as CSR.
How are workers and businesses being supported?
- The Finance Minister has eased statutory and regulatory compliances and extended many compliance filing deadlines that are otherwise due on 31 March
- To support daily wage construction workers, the Ministry of Labour and welfare has advised to directly transfer funds to about 3.5 crore registered workers
- The Confederation of Indian Industry has submitted suggestions for relief measures to the government, seeking a stimulus package of £22bn (INR 20 lac crore)
- The government has advised all companies to ensure that workers, especially contract labourers, who take leave as a precaution towards the pandemic should be treated to be ‘on duty’ and their salaries should not be deducted
- Uttar Pradesh state government announced cash handouts to an estimated 3.5 million daily wage earners and labourers
- Kerala state government announces a financial package worth £2.2bn (INR 20,000 crore) covering health packages, loan assistance, welfare pensions, free food grains, subsidised meals, tax relief, and arrear clearance
- The West Bengal Chief Minister has announced free food grains and rations under a public distribution system for the next six months
- Invest India has launched a Business Immunity Platform, designed as a comprehensive resource to help businesses and investors get real-time updates on India’s active response to COVID-19.