As the COVID-19 pandemic rapidly unfolded throughout the world, the global economy crumbled under the pressure. In the first three months of 2020, the Dow Jones Industrial Average saw its biggest quarterly drop since 1987. Rising unemployment, combined with the global economy’s predicted shrinkage by 3%, left a majority of countries on the brink of recession. This trend of poor economic growth has a number of global implications, but perhaps the most devastating is the effect it has on the social progress that has been built in developing countries. No country exemplifies this receding social progress more than India. In a country home to around 1.3 billion people, the COVID-19 pandemic has killed over 100,000 citizens and infected 6.4 million others. In fact, India stands second only to the United States in COVID-19 cases. As a country still in the midst of development, India’s prominence as a new epicenter of COVID-19 creates grave economic conditions that could threaten decades of social progress and poverty reduction.
In the years prior to the pandemic, India seemed to hold a growing influence on the world stage. Economic progress had lifted more than 90 million people from extreme poverty between 2011 and 2015. From developing infrastructure that built modern megacities to a modernizing military, India had been slowly cultivating regional hegemony. But, even before the pandemic, cracks had already begun to appear, beginning with its leadership. The year 2014 saw Narendra Modi’s rise to the position of Prime Minister as a representative of the right-wing Hindu nationalist Bharatiya Janata Party (BJP). His emphasis on Hindu nationalism brought him a tidal wave of support throughout the country, though it came at a cost. Mr. Modi enacted a new citizenship law that discriminated against Muslims, reduced the autonomy of the mostly Muslim region of Kashmir, and led political campaigns that focused on anti-Muslim sentiment throughout the country. While Hindus celebrated the cultural gains made from these policies, they ignored the grave economic consequences that arose from Modi’s economic agenda.
From 2016 to 2020, Indian economic growth shrank from 8% to just 4%. Though a number of Mr. Modi’s policies exacerbated this downturn, none did as much damage as the demonetization policy in 2016. On November 8th of that year, a surprise television announcement sparked chaos within India as the Prime Minister announced that 500-rupee and 1000-rupee notes were no longer considered legal tender, and they were to be replaced by new notes. As these sums constituted 86% of currency in circulation, the announcement sent shockwaves throughout the country, whose citizens had just fifty days to convert or deposit their money. The demonetization policies, intended to curb the rampant underground economy, ended up slowing the following year’s real GDP growth rate by half a percent.
Just four years later, India’s economy shut down in an eerily similar fashion. On March 24th, at eight in the evening, the Indian Prime Minister announced the world’s most severe shutdown: all 1.3 billion Indians were to remain inside their homes, beginning at 12:01 A.M. on March 25th, just four hours after the announcement. The announcement offered little explanation on how citizens were to get basic necessities, like food and water. Instead, the announcement only offered a threat of a one year jail sentence for those who violated the lockdown.
Wealthier members of Indian society could survive these policies, but the 45 million migrant workers who pour in from the countryside each year had a much more difficult time. A majority of these workers are fed and housed where they work, meaning they had nowhere to turn when business, restaurants, and schools shut down. They could either travel long distances back to their rural homes, or risk infection living in the city slums. The Hindu temples, Sikh gurdwaras, and Muslim mosques who would usually feed the homeless shut down, and the government was ill-equipped to provide housing and food for these migrants. Ultimately, thousands of workers constituted a mass exodus to the far corners of India, which spread the disease to rural communities on the outskirts of India.
As the pandemic raged on, startling statistics began to emerge. India tested one million samples per day, a relatively low per capita rate for a country of this magnitude, and reported nearly 100,000 new infections per day. Data from Johns Hopkins University reported that the virus is spreading faster in India than anywhere else in the world. This could have occurred as a result of Mr. Modi’s policies, which have been described as too restrictive, yet also too porous. The mass exodus of migrants, a direct result of the restrictive lockdown policies, spread the virus to rural communities that lack the public health infrastructure to control its spread. Because the initial response to the virus did not stop its spread, India now faces more shutdowns, which leads to more economic uncertainty as the pandemic rages through the country.
The combination of poor economic policies prior to the pandemic and the onslaught of the pandemic itself threaten to exacerbate the issues of poverty and push India’s social progress decades back. The Indian government provided around $266 billion in COVID-19 relief, with specific amounts set aside for poor populations. However, economists reported that too little of this relief reached its designated population. Instead, much of it went towards reviving businesses to make India a more appealing part of the global supply chain. Ultimately, the stimulus package proved ineffective in the face of rising infections and deaths in the country and led to a continued economic downturn. Tax revenues dropped, leaving states unable to pay their healthcare workers. Government debt rose to its highest level in 40 years. Manufacturing and consumer spending remain low. Last quarter, the Indian economy shrank by 24%. In the months since the beginning of the pandemic, the government has slowly loosened restrictions, allowing people to attend work and school, but the economic situation still remains dire. But, what exactly does poor growth and high COVID-19 cases mean for the 1.3 billion Indians?
As the pandemic seeps through India, it single-handedly unravels years of social progress. Shuttered businesses and schools means that nearly 200 million Indians could slip back into poverty, rapidly decreasing quality of life. Perhaps the greatest indicator of this change is the overwhelming number of children dropping out of school and entering the workforce. The United Nations estimates that 24 million children worldwide could potentially drop out of school. As schools closed due to the pandemic, many children in the developing world have no access to a computer or the internet to continue their education online. In 2019, just 38.5% of households in the developing world owned a computer. Even with a computer, few students have access to the internet or attend schools that would continue education online. Their families may need them to go to work in order to make enough money to survive.
Prior to the pandemic, impoverished areas had centers that provided families and children with resources to keep them in school, but many of these efforts have closed down. In India specifically, the government has shut down all anganwadis, or early childhood development centers for impoverished families. These shelters offer food, clothes, immunizations, as well as contraceptives for poor women. With the doors to these shelters shuttered, poor families end up sending their children to work in order to make ends meet. Children, who would otherwise be in school, end up rolling cigarettes, stacking bricks, serving tea outside of brothels, and in other illegal, often hazardous jobs. Prior to the pandemic, the government had been making concentrated efforts to remove children from dangerous working conditions and enroll them in schools, with a specific focus on girls’ education. But, as the pandemic continues on, many of these children may not even see the inside of a school.
Even after the pandemic ends, many of these children will continue to work in order to support their families. These effects have long term impacts on the country. The shutting down of anganwadis means that impoverished women and children have no access to important health and wellness measures. If communities spend too long without these resources, malnutrition, child and maternal mortality, and quality of life can decrease. If generations of families continue to struggle from the issues created in 2020, systemic poverty will continue to pervade India for decades. All the social progress that has been created over the past twenty years will unravel. If these communities do not recover from the pandemic, India will be unable to regain its economic standing and, thus, its global power.
Ultimately, the greatest effect of India’s emergence as an epicenter of COVID-19 is the irreversible damage it has done to social progress and mobility for the poorest Indians. Without a sustainable pandemic plan or sufficient aid, children have been forced back into the workplace while their parents are left to worry about food and shelter. Increasing child labor, as well as the decrease in social mobility for their parents, leaves India in a precarious position.