The government was right in imposing a nationwide lockdown to control the spread of COVID-19, but it should now let the economy function normally, former chief economist of the World Bank Kaushik Basu said on Thursday.
The global market is fearing that India would slide into a 'controlled economy', which would be very damaging, he added.
Basu said the first step (nationwide lockdown) which India took to contain the spread of the deadly virus was correct.
"But the language around the world is changing. People are worried about economic fallout. You have to allow economy to function.
"Beyond a point, if you have a completely closed economy, and the government makes direct delivery to people, you will not succeed," the eminent economist said in a virtual interaction with the Director of Institute of Economic Growth (IEG) Ajit Mishra.
Basu, currently a professor of economics at Cornell University, said the next one month is going to be very crucial.
"There are some signals that global market is fearing that India is going slide into controlled economy which will be very, very damaging,' he said, adding that Vietnam, Taiwan, Hong Kong and Mexico are positioning themselves to get more business.
Noting that India will have to live with the coronavirus for some time, he suggested that rather than the incidence of COVID-19, the country should look at fatalities due to the pandemic.
"For every 10 million people, number of people dying due to COVID-19 in Spain and Italy is somewhere around 5,000. In case of India, it is 10. And we should not ignore it," he said.
Talking about the post-COVID-19 world, Basu said the healthcare sector is going to be bigger.
India has extended the lockdown till May 17 with a complete ban on air travel, trains and inter-state road transport, but gave some relaxations for various business activities and people's movement within areas with limited or no COVID-19 cases.
The decision to extend the lockdown by two more weeks after May 3 came amid a continuous rise in the number of people testing positive for the deadly virus infection across states.
Prime Minister Narendra Modi had first announced a 21-day nationwide lockdown from March 25, which was later extended by two more weeks.
However, several experts have cautioned that the lockdown is severely impacting the economy and many rating agencies and industry bodies have forecast a sharp dip in the growth rate.
The death toll due to COVID-19 in the country rose to 1,783 while the number of cases climbed to 52,952 on Thursday, registering an increase of 89 deaths and 3,561 cases in the last 24 hours, the union health ministry said.
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