According to a paper by the Asian Development Bank (ADB), India’s Gross Domestic Product (GDP) is predicted to experience the most severe drop among South Asian countries due to school closures related to Covid-19. The global GDP and employment have contracted as a result of these shutdowns, and the situation is expected to worsen for countries like India that had extensive school closures during the pandemic.
The Global Impact of Covid-19: Economic Consequences
Projected figures indicate decreasing trends in GDP – an expected decrease of 0.19% in 2024, 0.64% in 2028, and 1.11% in 2030, with an overall expected loss of $943 billion. Such a decline has significant implications for skilled labor: with schools closing, it is estimated that about 5.44 million people globally will be denied entry into the skilled labor force by 2030. This could lead to an employment reduction of £94.86 billion. Projections for unskilled labour are similarly bleak, with employment expected to decrease by 0.22% in 2025, 0.51% in 2027, and 1.15% in 2030, leading to 35.69 million people potentially being drawn into unskilled labor.
Differential Impacts Across Different Economies
Economies with large student populations from rural areas or within the two poorest wealth quintiles have been hit hardest in Asia. Issues with Internet accessibility have hindered access to online education, affecting these student populations. As affected students transition into unskilled labor, economies with high rates of unskilled labor employment stand to experience significant learning and earning losses.
The Indian Scenario: A Closer Look
India’s GDP is expected to fall by 0.34% in 2023, 1.36% in 2026, and 3.19% in 2030. By 2030, India will account for 10% of the global GDP decline of $943 billion. With India’s workforce comprising of 408.4 million unskilled and 72.65 million skilled labor, a notable migration towards unskilled labor is likely, with 2% and 1% expected declines in unskilled and skilled labor jobs, respectively.
Understanding GDP and ADB
GDP is a measure of a country’s annual output of goods and services, essentially representing the economic output from the consumer end. The ADB, founded in 1966 with 68 members including India, strives to advance social and economic development in Asia and the Pacific.
Path Forward
The Indian government is taking action to stabilize the economy via monetary easing, fiscal stimulus, and supportive financial regulation. However, substantial investments are required in education to counter pandemic-induced learning losses. Other suggested measures include conducting assessments for affected students, increasing budget allocation for education, prioritizing disadvantaged groups, starting youth skill training programs, and undertaking educational reforms supporting both physical and remote learning.