E-Conclave: Economy can’t revive till lockdown restrictions end, says economist Montek Singh Ahluwalia

The Indian economy cannot restart completely without ending lockdown restrictions, said former head of the erstwhile Planning Commission and noted economist Dr Montek Singh Ahluwalia.

Speaking to India Today TV News Director Rahul Kanwal during a session of the India Today E-Conclave Jumpstart India series, he said, “We seem to be beginning to get out of the lockdown in a phased sort of way. I think that’s also the right thing to do.”

“But remember, the red zones are the ones most affected; they are a small part of the geography, but they are about 60 per cent of the GDP.”

“So, as long as the lockdown remains in place in the red zones, you really can’t expect an economic revival,” he said.

Montek Singh Ahluwalia said some of the restrictions in place are directly affecting supply-side constraints and stressed that those have to be removed first.

He further added that the country has to build a system to support “the incomes of the poor” who have been worst hit due to the extended lockdown, which has now crossed over 40 days.

Quoting CMIE data on rising unemployment, Ahluwalia said it shows a clear picture of how each sector has been affected. According to CMIE data, a large number of small traders have been affected due to the extended lockdown.

It may be noted that the unemployment rate has shot up to 23.5 per cent in April 2020 in the wake of economic disruption caused by the Covid-19 pandemic.