The economy of India and the impacts the second wave had on it
It has been quite a year and a half since the COVID-19 pandemic penetrated the deepest core of human civilization and made us realize the power of mother nature. In India, after the primary wave, we thought that we had gained control of things but the second wave found us wanting basic necessities like oxygen and medical supplies.
It might appear that the second wave is on its way with daily cases coming right down to under 60,000 from the peaks of nearly 4 lakh cases, but we have lost over 5 lakh precious lives to COVID-19 already. With the hope that things will significantly improve on the medical side, it’s time to assess the impact of the second wave on macroeconomics.
The government’s approach in handling the 2 waves has been different. The response to the second wave has been localised and driven by the states while within the first wave we went for a national lockdown. The second wave started within the west with Maharashtra, went up North and now’s peaking within the south of the country. To understand the economic impact of the second wave, let’s remind ourselves of the primary wave and its impact on the economy.
In the first wave, we went through a protracted national lockdown and a significantly lower number of peak cases. Manufacturing and therefore the urban economy had come to a grinding halt while the agricultural economy continued to manoeuvre due to less strict lockdowns. Agriculture further benefited from good monsoon and cheaper and better availability of labour.
Due to the closure of Mandis, vegetable vendors, and processing industries have also been hit. We can see the contrasting impact of the primary and therefore the second wave within the agriculture wage growth data.