Modi is urging Indian states to avoid lockdowns as virus spikes

Indian Prime Minister Narendra Modi, who imposed a strict lockdown at short notice last year, asked states to avoid closing companies as the South Asian nation grapples with a new wave of Covid-19 infections threatening a burgeoning economic resurgence .

The South Asian country is now the second most affected country in the world, trailing only the US, after reporting more than 200,000 new infections daily in the past six days.

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“I urge states to consider lockdowns as a last resort,” Modi said in a televised address on Tuesday. “They should seriously try to avoid lockdown and focus on micro containment zones.”

As infections increase, the country’s health system has been pushed to a breaking point, with hospitals reporting shortages in everything from intensive care beds to medical oxygen. Rising new cases have forced both India’s financial and political capitals to impose movement restrictions, with New Delhi mandating a six-day strict lockdown starting Tuesday.

In images reminiscent of India’s first strict lockdown at the end of March last year, where hundreds of thousands of workers fled cities, thousands tried to get home from Delhi bus terminals earlier this week to bus terminals in Delhi suddenly dried up with the new lockdown.

Meanwhile, at least six of India’s 30 chief ministers, two federal ministers and opposition leader Rahul Gandhi, have all tested positive for the virus in recent days.

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The country’s reference stock index fell to its lowest level since late January on Tuesday and the rupee is Asia’s worst performing currency this month as India became the epicenter of the new outbreak in the world.

In February, the central bank said it would change the economy to grow 10.5% in the year beginning April 1 after an estimated contraction of 7.7% in the previous 12 months.

According to HSBC Holdings Plc estimates, renewed lockdowns will cost the country 1% of gross value added in the April-June quarter and more if replicated by other states. Meanwhile, public finances will be hit by rising demand for social security programs, weaker tax revenues and uncertainty over asset sales, HSBC economist Pranjul Bhandari wrote in a note published Tuesday.

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Modi also said his government is working with states and companies to increase supplies of medical oxygen and critical drugs needed to combat the pandemic.

– With the help of Bibhudatta Pradhan and Upmanyu Trivedi

(Updates with exodus of workers in fifth paragraph)