ISSN 2330-717X

Poverty May Be COVID-19’s Legacy In India – Analysis

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By Shareen Joshi*

As the second wave of the COVID-19 pandemic recedes in India, the desperation for oxygen, therapeutic drugs, hospital beds and testing supplies has subsided for the moment.

While it is still too early to precisely analyse of the damage to India’s people, estimates suggest that the true scale of infections in the country have been as high as 400–700 million. Even a conservative fatality rate of about 2 per cent suggests that the second wave hit India on a staggering scale.

How are Indian households coping? How has the landscape of economic opportunity changed? Who is most vulnerable? A large section of academic literature at the intersection of public health, demography and economics provides two important insights.

The first, perhaps obvious, insight is that pandemics deplete human capital through mortality, morbidity and disruptions of investments in health and education. A second more subtle insight is that in the absence of social support, economic downturns can further deplete human capital and delay long-term recovery.

Many studies have demonstrated that pandemics have adverse effects on the economy. In India, the macroeconomic impact is already evident. The World Bank slashed India’s gross domestic product growth projection for fiscal year 2022 (which started in April 2021) to 8.3 per cent. The projection is based on optimistic assumptions about India’s vaccination program and warns that ‘the outlook could be weaker if vaccination does not proceed as rapidly as expected’.

Economic headwinds are also likely to emerge from the significant losses of life and productivity among India’s working adults. While data on age-specific infection rates is sparse, local studies provide clues.

study from Maharashtra found that until December 2020 COVID-19 accounted for about 5.3 per cent of deaths in the state and raised the rate of premature mortality of working adults by as much as 36 per cent. Given that the second wave was far more deadly, we can expect these numbers to be considerably higher, and the burden imposed on working adults greater.

Many survivors in these age groups are still recovering from being infected. Recent research suggests that these survivors may face declines in ‘health-related quality of life’ that may last for ‘weeks and even months after the infection’. Post-Acute COVID Syndrome or ‘long COVID’ affects about a third of all survivors and is associated with long-term symptoms such as chronic fatigue, shortness of breath, heart palpitations, a persistent loss of smell and ‘brain fog’.

There is also evidence that the disease can have serious and potentially long-lasting effects on the brain, with diminished cognitive capacities. The loss of life and reduced capabilities among working-age adults can have strong spill-over effects within households, who may be forced to pull children out of school and reduce their investments in other health inputs.

The result is a poverty trap where low human capital investment perpetuates diminished capabilities for the next generation.

Expectant mothers and young children are particularly vulnerable in these circumstances. Even indirect shocks to the health environment of expectant mothers can have significant long-term intergenerational consequences. A recent study also showed that children who are exposed to the H1N1 virus in utero experience diminished life expectancy and worse health and socioeconomic outcomes in older ages than surrounding birth cohorts.

Many Indian families with working adults and young children were struggling even before the pandemic hit. In 2018, the unemployment rate was already at a 45-year high. India was noted as ‘swimming against the tide’ to harness the benefit of the ‘demographic dividend’, the temporary surge in the number of working adults that occurs as a result of rapid declines in fertility, largely because of long-term underinvestment in human capital.

The pandemic has induced even greater levels of automation, a change in demand for skills, and limited the growth of low-wage occupations. For those who are economically vulnerable to begin with, the opportunities to rebuild are complicated.

These pressures are particularly salient in the informal sector that currently employs more than 90 per cent of India’s female workers and 86 per cent of male workers. In the first lockdown in April 2020, 120 million people (106 million men and 17 million women) lost their jobs. The lack of insurance and economic protection in this sector left people vulnerable to hunger, unemployment and homelessness. Women were particularly hard hit. They were 20 per cent less likely than men to regain employment after the lockdown.

Investing in expectant mothers and young children in the pandemic’s aftermath hinges on the participation of workers in ‘touch heavy’ occupations such as nursing and preventive health services.

During the pandemic, one million Accredited Social Health Activists, all women, complained about working conditions on the frontlines. They report a lack of adequate protective equipment, erratic remuneration and hostile working conditions.

Even in affluent hospitals, nurses, widely (and wrongly) regarded as ‘unskilled’ in the Indian cultural context, are without sufficient support. Addressing these concerns is a step towards long-term resilience and economic recovery.

India’s long-term economic prospects are closely tied to the health and resilience of its people. Policies such as cash transfers, direct assistance, employment programs, subsidised food programs and policies directly aimed at protecting the nutrition, health and education of children can shield Indians from the compound effects of the virus and the vulnerable economy.

Scientists and experts who were sidelined by policymakers in the months before the crisis have already called for a coordinated, evidence-based and participatory response on the health front. The same applies to human development. This is the best path to long-term recovery.

*About the author: Shareen Joshi is Associate Professor in the Edmund A Walsh School of Foreign Service at Georgetown University.

Source: This article was published by East Asia Forum

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East Asia Forum

East Asia Forum is a platform for analysis and research on politics, economics, business, law, security, international relations and society relevant to public policy, centred on the Asia Pacific region. It consists of an online publication and a quarterly magazine, East Asia Forum Quarterly, which aim to provide clear and original analysis from the leading minds in the region and beyond.

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