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© 2021 International Monetary Fund WP/21/279
IMF Working Paper
Asia and Pacific Department
State-Level Health and Economic Impact of COVID-19 in India
Prepared by Pragyan Deb and TengTeng Xu1
Authorized for distribution by Alfred Schipke
November 2021
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Abstract
The health and economic impacts of COVID-19 on India have been substantial, with wide variation across states and union territories. This paper quantifies the impact of containment measures and voluntary social distancing on both the spread of the virus and the economy at the state level during the first wave of the COVID-19 pandemic. We construct a de-facto measure of state-level social distancing, combining containment strigency and observed mobility trends. State-level empirical analysis suggests that social distancing and containment measures effectively reduced case numbers, but came with high economic costs. State characteristics, such as health care infrastructure and the share of services in the economy, played an important role in shaping the health and economic outcomes, highlighting the importance of adequate social spending, health care infrastructure, and social safety nets.
JEL Classification Numbers: C33, E65, O53, R11
Keywords: India; COVID-19; social distancing; containment measures.
Author’s E-Mail Address: PDeb@imf.org; TXu@imf.org.
Contents
Abstract
I. Introduction
II. Data and Stylized Facts
III. Mobility, social distancing, and containment
IV. The Impact of Effective Social Distancing
A. Methodology
B. Aggregate Results
V. What Drives Heterogenity at the State Level?
A. Methodology
B. Results: Heterogenity in Health Outcomes
C. Results: Heterogenity in Economic Outcomes
VI. Conclusions and policy discussions
References
Annex Figures
Annex Tables
We thank Ruchir Agarwal, Faisal Ahmed, Elif Arbatli Saxegaard, Surjit Bhalla, Helge Berger, Carolina Bloch, Siddharth Kothari, Davide Furceri, Alfred Schipke, Katrien Smuts, Jarkko Turunen, Filiz Unsal, and participants of the IMF’s APD Seminar for useful feedback. Shihui Liu and Nimarjit Singh provided excellent research assistance. All remaining errors are our own.