India’s Prime Minister Narendra Modi has put the entire nation of 1.3 billion people under lockdown for three weeks. It might seem extreme given just 10 Covid-19 deaths reported so far, but as we wrote on March 23, India will have to face the pandemic on a shoestring. Plus, its economy was already on its knees, ravaged by soured corporate loans.
Many Indians have rushed to stock up on supplies. Modi needs to make sure the ordeal is manageable for poor, daily wage earners who work in the informal sector and have little in the way of cash savings. The government can borrow more or even raid the Reserve Bank of India’s reserves to fund cash handouts. It might make better sense to ensure a supply of free food. India has been quick to shutter businesses; now it will have to dig deep to manage the fallout.