Research
- +4
Milan Vaishnav, Rahul Verma, Rukmini S., …
{
"authors": [
"Christophe Jaffrelot"
],
"type": "other",
"centerAffiliationAll": "dc",
"centers": [
"Carnegie Endowment for International Peace"
],
"collections": [],
"englishNewsletterAll": "",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Endowment for International Peace",
"programAffiliation": "SAP",
"programs": [
"South Asia"
],
"projects": [],
"regions": [
"South Asia",
"India"
],
"topics": [
"Economy"
]
}
Source: Getty
Other
From Slowdown to Lockdown, India’s Economy and the COVID-19 Shock
The Indian economy that is facing the COVID-related crisis today was already badly affected by an under reported slowdown for more than one year.
Published on Jun 11, 2020
Source: Institut Montaigne
The Indian economy that is facing the COVID-related crisis today was already badly affected by an under reported slowdown for more than one year. This state of things complicates the government’s response - that is not, today, proportionate to the challenge.1
It was just yesterday that the IMF was congratulating India for being a driving force of the global economy, with growth rates flirting with 8% in 2016. The economic slowdown that hit the country in 2017-2019 divided this rate by almost two – as the growth rate for the fiscal year 2019-2020 as been only 4.2% according to the Indian government, after a steady decline, month after month (the growth rate of the last quarter, from January to March 2020, was only 3.1%). This decline, that came as a surprise, deserves examination, going beyond explanations focused on the artificial inflation of Indian performance by the authorities.2 The issue of transparency with the manipulation of figures adds to problems linked with the non-publication of certain statistics, including unemployment and consumption figures. Yet, this still does not explain the signs of an economic and social crisis that appeared in 2019.
Using the most reliable data available, we will first try to assess the extent of the 2017-19 slowdown and its social and fiscal consequences before looking at the impact of the COVID-related crisis and the remedies implemented by the authorities since March 2020.
This policy brief was originally published by the Institut Montaigne.
Notes
1 I am grateful to Sreenivasan Subramanian, Bruno Dorin and Eve Colson-Sihra for their comments on an earlier version of this brief.
2 Indeed, by the very admission of Arvind Subramanian, the former Chief Economic Advisor of the Modi government who resigned in 2018, the real growth rate of the economy has been amplified by two and a half percentage points since 2015, the year in which the government adopted a new method of calculating GNP. If Subramanian is correct, India's growth rate in 2019 has been between 2 and 3% according to the old method of calculation.
About the Author
Christophe Jaffrelot
Former Nonresident Scholar, South Asia Program
Jaffrelot’s core research focuses on theories of nationalism and democracy, mobilization of the lower castes and Dalits (ex-untouchables) in India, the Hindu nationalist movement, and ethnic conflicts in Pakistan.
- The BJP in Power: Indian Democracy and Religious Nationalism
- Ceasefire Violations in Kashmir: A War by Other Means?Article
Christophe Jaffrelot
Recent Work
Carnegie India does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie India
- India Signs the Pax Silica—A Counter to Pax Sinica?Commentary
On the last day of the India AI Impact Summit, India signed Pax Silica, a U.S.-led declaration seemingly focused on semiconductors. While India’s accession to the same was not entirely unforeseen, becoming a signatory nation this quickly was not on the cards either.
Konark Bhandari
- The PSLV Setback: Restoring India’s WorkhorseCommentary
On January 12, 2026, India's "workhorse," the Polar Satellite Launch Vehicle, experienced a consecutive mission failure for the first time in its history. This commentary explores the implications of this incident on India’s space sector and how India can effectively address issues stemming from the incident.
Tejas Bharadwaj
- AI Adoption Journey for Population ScaleCommentary
Connecting real-world AI use cases across sectors such as health, education, agriculture, and livelihoods can help policymakers, innovators, and institutions align around a shared goal. This article looks at a framework ensuring that AI works for everyone.
Shalini Kapoor, Tanvi Lall
- The Impact of U.S. Sanctions and Tariffs on India’s Russian Oil ImportsCommentary
This piece examines India’s response to U.S. sanctions and tariffs, specifically assessing the immediate market consequences, such as alterations in import costs, and the broader strategic implications for India’s energy security and foreign policy orientation.
Vrinda Sahai
- Revisiting the Usage of Refurbished Equipment in India’s Semiconductor EcosystemArticle
This article looks at the progress of the Semiconductor Laboratory fab modernization plan based on publicly available documents, and potential learnings for future upgrades to government-owned fabs and India’s larger semiconductor ecosystem, especially regarding the use of refurbished equipment.
Shruti Mittal, Konark Bhandari
