India’s GDP contracted nearly 24% in the April-June quarter of 2020 (compared with the same quarter in 2019). While this is the outside edge of most estimates, it is likely to be an underestimate, as unorganised sector data is not fully accounted for. Furthermore future revisions will likely be downwards as data from a larger set of smaller firms gets incorporated.
The usual suspects jumped to defend the government, trying to blur the dismal truth by comparing India’s quarterly growth numbers with the annualised growth numbers of other countries.
Here’s India’s Executive Director at the International Monetary Fund, no less, getting 3,000 plus retweets for spreading fake news, while pretending to critique “fake news”:
This is fake because:
Others have pointed out that India’s economy was bound to suffer under what at one point was described as “the most stringent lowdown in the world”. Certainly, India began a near-total lockdown on 25 March with four hours of notice that eventually led to millions of migrants trekking home once they had run out of money and food.
But if we look at Oxford University’s lockdown stringency index, it turns out that India’s lockdown was among the strictest for six weeks, between 25 March and 3 May, after which it began to slowly ease. Looking at the average score of the index between April and June 2020 shows that India was in the top 20th percentile, and that 27 countries — many in Latin America and in the Arab world — had more stringent lockdowns during this period.
The chart below shows that India’s lockdown was stricter than many western countries, but not by that much.
There is clearly a link between lockdown stringency and economic growth, but it’s not a direct or linear relationship. In India, the lockdown derailed an already struggling economy that had been slowing for at least two years. On top of that, it has so far failed to flatten the Covid-19 curve.