Coronavirus Outbreak: Prolonged lockdown may push millions into margins of subsistence, says former RBI governor Subbarao

A prolonged lockdown may possibly push millions of Indians into the 'margins of subsistence', former RBI Governor Duvvuri Subbarao said on Sunday while expecting a 'V' curved recovery once the COVID-19 crisis ends and the turnaround in India to be faster than some economies

Press Trust of India April 27, 2020 11:57:48 IST
Coronavirus Outbreak: Prolonged lockdown may push millions into margins of subsistence, says former RBI governor Subbarao

Hyderabad: A prolonged lockdown may possibly push millions of Indians into the "margins of subsistence", former RBI Governor Duvvuri Subbarao said on Sunday while expecting a 'V' curved recovery once the COVID-19 crisis ends and the turnaround in India to be faster than some economies.

He was participating in a webinar on "History repeats - but differently- Lessons for the post-Corona World," organised by the Manthan Foundation here, in which former Deputy Governor of RBI Usha Thorat took part.

"Because most analysts believe that this year India will actually have negative growth or growth will contract. We must remember that even ahead of the crisis two months ago our growth slowed. Now it has completely stopped.

 <span class=Coronavirus Outbreak Prolonged lockdown may push millions into margins of subsistence says former RBI governor Subbarao" width="380" height="255" class="size-full wp-image-1078163" />

Former RBI governor Duvvuri Subbarao. Reuters.

Last year growth was five percent. Just imagine, five percent growth last year and we are going to negative or zero growth this year, a decline of five percent growth," he said.

Click here to follow LIVE updates on coronavirus outbreak

"It is true that India is going to perform in this crisis better than most other countries.

But that is no consolation....

Because we are a very poor country and if the crisis persists and if the lockdown is not lifted soon enough, it is quite possible that millions of people will be pushed into the margins of subsistence, he said when asked about his views on the present situation.

Click here to follow LIVE news and updates on stock markets

Subbarao said that as predicted by analysts, India will have a V-shaped recovery which is far better than most of the other countries.

"And why do we expect a "V" shaped recovery? Because unlike in a cyclone or in an earthquake, this is not a natural disaster constraint.

No capital has been destroyed. Factories are standing. Our shops are still standing. Our people are ready to work as soon as the lockdown is lifted.

So it is quite possible the recovery will be V-shaped and while we have a V-shaped recovery, I think India has a better chance then most of the countries," he opined.

According to him, India's recovery was faster than many other countries after the 2008 global financial crisis.

On IMFs prediction that India may grow at 1.9 percent during the current year against about five percent in the last fiscal, Subbarao said many analysts feel that the prediction is outdated and the growth in GDP may slip into negative.

He said the "life versus livelihood" dilemma for the country is arguably very "short while" for India.

Usha Thorat said pumping more liquidity into the system alone cannot work and banks and Non-Banking Finance Companies (NBFC) will need credit guarantee or enhancement to start lending.

She also said that states need more support during the crisis and streamlining of non-merit subsidies was required.

Updated Date:

also read

COVID-19 vaccine production increasing, India may be first country to have DNA-based jab, Mansukh Mandaviya tells RS
India

COVID-19 vaccine production increasing, India may be first country to have DNA-based jab, Mansukh Mandaviya tells RS

Replying to a short discussion on COVID-19 management in Rajya Sabha, the minister said technology transfer to several companies has started and they will begin production in the coming days

Tokyo Olympics 2020, Form Guide: Tracking Indian women's hockey team over last two years
Sports

Tokyo Olympics 2020, Form Guide: Tracking Indian women's hockey team over last two years

Tracking the Indian women's hockey team's fortunes over the last two years heading into Tokyo 2020 Olympics

Tokyo Olympics 2020, Form Guide: Tracking Indian men's hockey team over last two years
Sports

Tokyo Olympics 2020, Form Guide: Tracking Indian men's hockey team over last two years

Firstpost.com charts the the Indian men's hockey team's fortunes over the last two years heading into Tokyo 2020 Olympics.