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As Number of Coronavirus Cases Rises, India Resorts to Local Lockdowns

Editor, TRANSFIN.
Jul 14, 2020 11:54 AM 4 min read
Editorial

Over the past couple of weeks, the rising need to balance efforts to curb the spread of coronavirus infections without inflicting a heavy toll on the economy has given rise to a new trend - that of imposing “localised lockdowns” rather than nationwide ones.

What is a Local Lockdown?

As the name suggests, “localised” or “local” lockdowns involve imposing restrictions on movement and business activity on a particular region, town or city that has a cluster or outbreak of cases. 

In order to avoid these cases being transmitted far and wide, the cluster is cut off from the outside world until the number of cases comes down and the outbreak is controlled.

 

What Does a Local Lockdown Involve?

A local lockdown has all the characteristics of a nationwide one; the only major difference is the scale. Non-essential services are barred, curfews are enacted and movement is severely restricted.

Meanwhile, testing for COVID-19 is accelerated so that all positive cases - symptomatic and otherwise - are identified, their contacts traced, put in quarantine and given the required treatment so that more people recover, the Test Positivity Rate goes down - and finally, the local shutdown can be lifted.

 

Local Lockdowns in India

We’ve all seen charts of India's COVID-19 curve - of the number of positive cases skyrocketing every day. As of July 14th, the number of confirmed cases has crossed 9L and by that metric India is the third-worst affected nation in the world, after the US and Brazil.

Now here’s a chart of the stringency of the Government’s response, which was initially limited to limiting foreign travel, then evolved to a full-blown lockdown, and is now in a stage of easing and localised measures. You can see how the stringency has been gradually easing since April.

An early incarnation of the localised approach was in the demarcation of highly infectious places as “containment zones” in different states. These places could be streets, residential blocks or entire districts. For containment zones, the lockdown remained in place even as the rest of the country gradually got back on its feet.

In recent weeks, different state and local governments have taken the initiative to impose localised shutdowns. On June 28th, Guwahati went into total lockdown. Thiruvananthapuram, Patna and Pune followed suit. The entire state of Uttar Pradesh (UP) imposed a lockdown over the past weekend. Bengaluru began a week-long lockdown today (July 14th).

The regulation of these lockdowns - i.e., rules on what is allowed and what isn’t - is not uniform. For example, while Pune closed even grocery stores, Kolkata followed a partial shutdown that applied only to containment zones.

 

The Economics of Local Lockdowns

In a country like India, no town, city, region or state is self-sustaining. All of them are crucial cogs in the economic machine, interconnected and interdependent on one another to function seamlessly.

Localised lockdowns are no doubt not as destructive as their nationwide counterparts. But that doesn’t mean they are painless. If one city is put under lockdown for a weekend or a week, it would invariably have serious repercussions for manufacturing and supply chains.

Over the past week, FMCG, smartphone and automobile firms have said sales declined by about a third in this period on account of localised lockdowns.

Mobile phone retailers said sales in July have dropped 30-40% from June. When a lockdown was imposed in Thane a few days ago, Apple had to temporarily shut down its national distribution centre in Bhiwandi, as did many other brands that have warehouses in the region.

Then there’s the torturous uncertainty that mini lockdowns can cause, especially if they are imposed frequently and sporadically.

For example, last weekend UP was in lockdown, but at the last minute the state government announced that industrial units could remain functional. This notice didn’t come quickly enough for companies like Oppo, Vivo, Dixon and LG, whose operations, attendance and production capacities took a hit.

The uncertainty isn’t limited to businesses. It extends to consumer confidence. A period of lockdown will obviously see a significant dip in demand, but if these shutdowns are imposed intermittently the long-term impact on demand could be severe.

Besides supply chain headaches, the problem is aggravated when you consider the fact that most businesses are operating at sub-par capacity already. Not only because they have lower volumes of demand to cater to but also because worker attendance has plummeted - either due to infection concerns or due to labour shortages on account of workers’ reluctance to return to big cities, where their job security is unguaranteed.

To top it all, businesses that reopen do so under the ever-ominous spectre of new infections that could shut down their establishments again. And on a broader level, there is still the threat of a second wave of infections across the country, which could lead to more local shutdowns or culminate in another nationwide lockdown altogether.

 

Local Lockdowns Around the World

It’s worth noting here that the concept of local lockdowns isn't new. In fact, one of the reasons why much-touted COVID success stories like South Korea and Taiwan were able to “flatten the curve” and keep infection levels at a minimum was that they had embraced a target-specific, localised approach early on.

The key difference is that they acted on time, early on and quelled clusters before they could spread nationwide. Moreover, these efforts were supplemented by efficient contact tracing and strong healthcare systems.

Now, as countries ease nationwide lockdown restrictions, they are confronted by an inevitable uptick in new infections - as in India. But the policy has visibly shifted in favour of local lockdowns, which are less economically catastrophic vis-a-vis nationwide lockdowns. 

The UK imposed its first local shutdown earlier this month in the city of Leicester. Local lockdowns were similarly imposed in Lisbon, Catalonia and Buenos Aires to stem a rise in positive cases. Here’s an interactive map of how different governments’ responses to the pandemic have eased or grown more stringent over time.

FIN.

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