The Contribution of Different Zones to the Economy

With Lockdown 3.0 beginning today, definitions of various zones have been revised and some activities have been resumed. Whether green zones contribute significantly to India’s GDP or not remains an important question. An analysis suggests that Red zone districts have more population, contribute nearly 50% to India’s GDP, and avail maximum percentage of deposit and credit (loan) services that are important to churn the economy. Complete Coverage: Coronavirus

Crux of the Matter

How are Zones Defined? The new definition of COVID-19 hit zones takes into account: – incidence of cases – doubling rate – extent of testing – surveillance feedback to classify the districts Red zones are zones with a high number of cases and short doubling rate. An orange zone is where the number of cases is less but has been recorded recently. Orange zone has the potential to turn into a red zone if proper measures are not taken. A green zone is now defined as a zone where no cases have been reported in the last 21 days as compared to 28 days in the Lockdown 2.0.

Activities Permitted

What Remains Closed Across India

1. Domestic and International air travel

2. Interstate movement of individuals, buses, and trains except permitted

3. Malls, theatres, gyms, swimming pools, auditoriums, etc.

4. Religious, political, social, academic, sports, entertainment, or any other form of gathering

5. Educational and training institutes of all sorts

6. Hospitality services except permitted

7. Places of worship/religious places

Contribution of Zones Towards the end of April, around one-third of all districts were in Red zones. Another 30% were in orange, and nearly 40% were in the green zone. The one-third red zones account for India’s nearly 45% of the population. Whereas, the red zone districts’ contribution to the Indian GDP was more than 50%. Deposits in banks and credit availed by the red zone districts were ~74% and ~83% respectively.

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It can be drawn from this data that the opening of the green zone and the gradual opening of the orange zone will hurt India’s GDP. Green zones contribute only 20% to India’s GDP and form only 5-10% of the deposits and credit disbursement in the system. As of May 2nd, 2020, the number of districts in Red zones was 130, Orange zone – 284, and Green zone – 319.

Curiopnedia

1. Containment was an American drama series with a short run in 2016. The series follows an epidemic outbreak in Atlanta, leaving a part of the city quarantined with those stuck on the inside fighting for survival.

2. While these zones are developed due to health concerns, India also has identified many areas as Special Economic Zones (SEZ) with a target to boost employment, exports, foreign investment, etc.. These SEZ have special exemptions like exemption from duties on all imports for project development to attract FDI.

Curated Coverage

1. News 18 – Lockdown 3.0: What’s Allowed & What’s Not in Red, Orange & Green Zone

2. Money Control – Coronavirus hotspots | Here are the Red, Orange and Green zone districts after May 3 as per new guidelines

3. Livemint – Lockdown: List of what’s allowed, what’s not in green, red, orange zones

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