Can COVID-19 Economic Recovery Plans Help Put India on the Path to Low Carbon Sustainable Development?

The first case of the 2019–20 coronavirus pandemic in India was reported on 30 January 2020, originating from China. As of 30 April 2020, the Ministry of Health and Family Welfare has confirmed a total of 33,050 cases, 8,325 recoveries (including 1 migration), and 1074 deaths in the country. Experts suggest the number of infections could be much higher as India’s testing rates are among the lowest in the world. The infection rate of COVID-19 in India is reported to be 1.7%, significantly lower than in the worst affected countries.

Keeping in view the surge and precautionary measures including social distancing, India has been under a total lockdown from March 22 to May 17. This has been a historic decision taken by the Indian government to impose a nationwide lockdown of 1.3 billion people (almost 20% of humanity worldwide). The government’s actions so far have resulted in lower reported cases, recovery of about 29% with a mortality rate of 3.2%.

Recognizing this strenuous effort of the Indian government’s lockdown, the Oxford COVID-19 Government Response Tracker (OxCGRT), in its report based on data from 73 countries, reports that the Indian Government has responded more stringently than other countries in tackling the pandemic. Acknowledging this massive exercise of lock-down, Michael Ryan, chief executive director of the World Health Organisation’s health emergencies program, said that India had “tremendous capacity” to deal with the coronavirus outbreak and, as the second-most populous country, will have an enormous impact on the world’s ability to deal with it.

Given a complete lockdown in India, there has been, like other countries, a complete halt in production and consumption of goods, services including manufacturing, and there are visible signs of economic suffering necessitating economic stimulus and bailouts by industry- big, medium and small- coupled with demands of the industry. The worst-hit industries have been aviation, the services sector in general, automobile, and construction. The coronavirus has displaced about 10 million laborers from their work adding to a downturn in the economy. In order to support these migrant workers, the Indian government in the last month set aside 1% of its gross domestic product to support approximately 10 million informal workers by way of providing food security and handing them 25 USD as basic income through direct cash transfers to ensure their well being and survival. Subsequently, the government also announced 50 billion USD to address the issue of liquidity in the banking sector.

COVID-19 has also dealt a fresh blow to the country’s health care system and exposed vulnerabilities in terms of the lack of testing facilities, personal protective gear, nurses and doctors, and ventilators along with a shortage of beds and hospitals for the infected patients with the virus. India currently accounts for 1 bed per 1000 patients and 5 patients per doctors against WHO’s prescribed minimum standards of 3 beds per 1000 patients. If this is the case and assuming that there could be a rebound, it is estimated that by Q1 of 2021 the government would need to infuse about 2 billion USD into improving the health systems and about 12 billion USD over the next decade to create about 2.5 million hospital beds.

The Indian Prime Minister, in a televised address, also announced a large economic recovery (reform) package pegged at 270 billion USD. It is aimed at strengthening the country’s supply chains through the private sector and public sector participation in making India self-reliant (without depending on any outside support for essential supplies during anything like COVID-19 next time). This recovery package is the largest announced by far in independent India’s history accounting for 10% national gross domestic product and 70% of India’s total budget presented for the financial year 2020-2021 in February this year.

While announcing the economic recovery plan, the Indian Prime Minister also spoke about climate change and global warming as key future challenges and asked for responsible conduct by the companies in re-setting their economic activities in the post-lock-down period starting May 18. He also stressed technology-driven economic growth, putting people at the center of overall sustainable development for India. Details of the package are being worked out and are going to have key climate and global warming measures embedded into the economic recovery measures for follow up and reporting.

The national lockdown in India, like other places, has proven to result in improved climatic conditions including low emissions, cleaner rivers, lower CO2, cleaner air, and improvements in biodiversity. The government has been discussing directly with the industry the possibility of adopting practices post-COVID-19 that will allow for the continuation of these improved climatic conditions.

For instance, the government is discussing with the auto industry making greater use of Bharat VII fuel (the cleanest transport fuel) for their new cars, undertaking and revising the adaptation of the proposed e-mobility policy one year ahead of the planned date, and strengthening the EV charging infrastructure and storage facilities. The government also said they would provide subsidies to those who shift to electric cars or clean-fuel cars. With airlines, the government is discussing their plans to lease out new generation aircrafts that are superior in design and more fuel-efficient. Similarly, with the construction and real estate sectors, discussions are underway to promote the use of graded steel, natural materials made of wood, more efficient cement materials, and cutting the usage of water in building new facilities.

During these trying times, India like other countries has seen a visible drop in its NOx and CO2. It has posted a drop of 62% in its NOx and 42% in CO2 (best case scenario) levels. While these changes are visible on a short term basis with questions remaining whether such a situation can hold its ground post the virus period when industrial activities resume full-blown.

“This drop of emissions of 6%, that’s unfortunately (only) short-term good news”, said Professor Petteri Taalas, World Meteorological Organization (WMO) Secretary-General, in reference to a 5.5 to 5.7% fall in levels of carbon dioxide due to the pandemic, flagging that once the industrial activities resume, the emissions can go back to its normal levels. “The extent of urgency in countries’ ability to achieve 1.5 degree Celsius target requires a regular and verifiable emissions cut of 7.5% from 2020 to 2030”, states UNEP led The Emissions Gap Report, 2019

Activity Rating: ** Positive Long Term

Take Action:

The COVID-19 pandemic has been devastating for people and economies while simultaneously being a boon in disguise for our climate and environment. The Indian government has already committed to embedding climate-resilient and technology measures based on human-centric sustainable development. Alongside the measures announced, the government is further requested to push with greater vigor policy measures such as the promotion of clean fuel; cleaner heating/ cooling options, green-grids, and phase-out of coal, e-mobility measures and creating more green jobs may help stabilize the climate gains made during the current pandemic.

Contact:

Smt. Nirmala Sitharaman, Honourable Union Minister of Finance

Ministry of Finance, North Block

Government of India, New Delhi

Telephone: +91-11-23793791/2, Email: appointment.fm@gov.in

Written by Pooran Chandra Pandey, Climate Scorecard India Country Manager