Prime Minister Narendra Modi is under increasing pressure to demand another nationwide lockdown in India as the overwhelmed health system struggles to fight a devastating second wave of Covid-19.

However, a member of Modi’s economic advisory board says that state governments should instead have the final say on social restrictions.

“All in all, the current policy of leaving it to different states to take local conditions into account and adopt a lockdown strategy – I think it’s a better one overall,” said V. Anantha Nageswaran, part-time member of the Prime Minister’s Economic Advisory Board, said Tuesday to CNBC’s “Squawk Box Asia”.

Calls for a national lockdown – as imposed between late March and May last year – have grown louder as the Indian health system deteriorates and patients suffer from the lack of hospital beds, medical oxygen and drugs needed to treat the disease Disease will be rejected.

Leading coronavirus adviser to the White House, Anthony Fauci, said in an interview with ABC News on Sunday that India must be shut down in order to break transmission chains.

So far, the central government has resisted lockdown calls and allowed states to tighten their own local restrictions, including lockdowns and curfews.

Instead, the government is focusing on delivering global aid – including oxygen concentrators, bottles and generation equipment, and the antiviral drug Remdesivir – to affected areas. The country is also stepping up its vaccination campaign.

People aged 18 and over waiting to be vaccinated against Covid-19 at a vaccination center on the Radha Soami Satsang site operated by BLK Max Hospital on May 4, 2021 in New Delhi, India.

Hindustan Times | Hindustan Times | Getty Images

Nageswaran stated that at this point, the benefits of a statewide lockdown will not significantly outweigh the costs. He added that in cases the increase is still relatively localized in different pockets rather than nationally.

India has reported more than 300,000 cases per day for 20 consecutive days. However, on Tuesday, the Ministry of Health said its data showed a net decrease in total active cases over a 24-hour period for the first time in 61 days.

India’s death toll from coronavirus is close to 250,000.

Economic growth path

Last year’s national lockdown held India back from growth and pushed the economy into a technical recession. Before the second wave of infections, the economy was slowly on the mend – but economists are now predicting that the recovery will be delayed given the current situation.

There is a growing likelihood that localized lockdowns are likely to last through June or beyond. Given the current rate of vaccination, any attempt to fully reopen the economy could lead to a potential third wave of infections, Kunal Kundu, Indian economist with Societe Generale investment bank, said in a recent note.

Kundu said the bank had forecast real GDP growth of 9.5% year-over-year for India’s fiscal year ending March 2022, which is below the market consensus. But even this goal is no longer tenable, as it was assumed that the economy will open sooner due to the rapid pace of vaccination.

“With localized lockdowns through June and beyond, this increases the downside risk to our existing growth forecast. We now expect real GDP to grow by 8.5% for the current year,” said Kundu.

He added that India’s ability to chase the new variants will be key to preventing subsequent waves. To do this, the country must “provide more fiscal resources for genome monitoring and vaccine research” and ensure that all temporary Covid-19 care centers are still in operation, he said.

Nageswaran added that if India’s Covid-19 cases don’t peak in the next two weeks and drag on into the next quarter, it will be more difficult to match the country’s pre-pandemic growth trajectory through fiscal 2022-2023.