India is struggling to contain the economic and health fallout of the spreading coronavirus outbreak that has so far infected 519 in India and killed 10 people
Prime Minister Narendra Modi has imposed a three-week long nationwide lockdown across India to help contain the spread of coronavirus infections, allocating an extra $1.97 billion for health care.
“If we listen to the health experts we know that 21 days are crucial to break the cycle of transmission,” Modi said in his televised address to the nation. “For a few days forget what it means to go out. Today’s decision of a nationwide lockdown draws a line outside your home.”
India is struggling to contain the economic and health fallout of the spreading coronavirus outbreak that has so far infected 519 in India and killed 10 people.
India’s rupee weakened offshore during Modi’s address, which was after local markets had shut. The one-month non-deliverable forward was trading at 77.63 a dollar, versus 77.32 before the speech. The SGX Nifty Futures for March delivery slumped more than 3%.
In the last week, the government has implemented a near complete lockdown of its major cities and suspended train, flight and long distance bus services. Modi said in his address governments would take steps to ensure the supply of essential items, and asked states to prioritize saving lives.
The biggest challenge for Modi will be to curb the spread of the virus in a country of 1.3 billion and shield an economy that’s set to expand at the slowest pace in more than a decade. But experts say the country could be on the same trajectory as Italy, where the outbreak quickly escalated, causing hospitals to overflow.
The fiscal measures come at a time when the government’s income is already under pressure with falling tax collections. Global economic uncertainty is expected to derail plans to sell state-owned companies and supply chain disruptions may affect trade.
Oxford Economics has slashed India’s growth forecast for the first quarter of 2020 to 3%, a number not seen even during the worst of the global financial crisis. Meanwhile, the central bank last week announced measures to boost liquidity while holding back from following global peers with a rate cut.