Costs of India’s Covid Crisis Are Too High
Cases are rising rapidly, as is the long-term damage to the country’s potential.
Millions of children can’t go to school.
Photographer: Dibyangshu Sarkar/AFP/Getty Images
India is reeling from a quadruple whammy that is practically unique even during this pandemic. First, growth has taken a hit that appears to be larger than any of its peers, with GDP shrinking 23.9% in the first post-pandemic quarter. While the economy has re-opened somewhat since then, it remains beset by supply constraints. That means — second — that inflation may have reached almost 7%, according to Bloomberg Economics’ Abhishek Gupta.
That’s well out of the Reserve Bank of India’s comfort zone. And, third, all this has hit an economy that was already suffering from slipping potential growth and a major tax revenue crisis following the underperformance of a national goods-and-services tax.