Impact of Coronavirus COVID-19 on the Indian Economy

India, one of the fastest-growing economies, has been significantly affected by the ongoing global pandemic of Coronavirus (COVID-19). This article delves into the various dimensions of these impacts, from the human toll to the economic consequences.

Overview of the Pandemic in India

As the world grapples with the COVID-19 pandemic, India stands as a significant case study. According to recent statistics, the number of deaths attributed to COVID-19 in India is approximately 4.5 lakhs. This number is a stark reminder of the human tragedy, but it also underscores the economic repercussions that follow from such unprecedented loss of life.

Economic Impact of the Pandemic

The full extent of the economic downturn caused by the pandemic is substantial. Prior to the pandemic, the GDP of India was around Rs.145 lakh crore for the fiscal year 2019-2020. However, the GDP dropped to approximately Rs.137 lakh crore in 2020-21. A drop of about Rs.8 lakh crore can be attributed largely to the pandemic.

Such a significant drop in GDP has had far-reaching implications for every sector of the economy. It's important to consider the loss in spending capacity due to the loss of earning members in households. Assuming an average family size of five, it can be estimated that at least 20% of the total deaths were of earning members, leading to a sharp decline in both the earning and consumption capacities of many families.

Healthcare Infrastructure and Adequacy

The healthcare infrastructure in India is severely challenged by the pandemic, despite some positive steps taken by the government. The ratio of allopathic doctors to the population is about 1:1300, far below the WHO-recommended 1:1000. This gap is evident given the strain on healthcare facilities during the second wave in May 2021, where the economic cost was estimated to be around Rs.2.4 lakh crore.

The report by an international rating agency reveals an economic cost of approximately Rs.60000 crore per week, or 8 billion worth of economic losses every week. This cost is attributable to the inadequate healthcare infrastructure, leading to increased strain on resources and further economic downturn.

Spending on Healthcare and CESS Solution

India's healthcare expenditure as a percentage of GDP is amongst the lowest in the world, standing at less than 2%. This is in stark contrast with countries like the UK, the Netherlands, and Finland, which spend over 9% of their GDP on healthcare. Even countries like Bangladesh allocate around 3% of their GDP to public healthcare.

Given this critical situation, there is an urgent need to increase public spending on healthcare. One potential solution is to introduce a small and palatable Cess, such as the "Health Infrastructure Cess" or any other suitable name, which would significantly improve the healthcare infrastructure in the country.

The importance of investing in public health cannot be overstated. By reducing the overall costs related to healthcare and improving public health infrastructure, India could mitigate future health crises and safeguard the economy against such sudden shocks.