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After almost two months of severe lockdown, calls for lifting it are growing louder as economic costs are pile up while Covid-19 cases show no signs of reducing.India can’t afford an extended lockdownThe government has started relaxing lockdown rules for selected economic sectors like automation, cargo, e-commerce, IT & ITeS, and courier services among others besides imposing a night curfew from 7 p.m. to 7 a.m. The centre has classified the districts into three broad categories - red, orange, and green zones - which is to be revised weekly based on the incidence of cases, rate of doubling, and the extent of testing and surveillance response. It is of great concern that all the major cities across the country including Delhi, Mumbai, Chennai, Hyderabad, and Kolkata are in red zones. If strict lockdown measures are extended even after May 31 2020, the government would need to come out with further measures, apart from the declared Rs 20,00,000 crore fiscal stimulus. For the 467 million people belonging to the self-employed and non-salaried classes (including contractual, non-contractual and the migrant labourers), this prolonged lockdown is becoming far more life threatening than the danger of being affected with Covid-19 and many may die from hunger, fatigue, and suicides. The worst hit is the MSME sector. ILO estimates have shown that if minimal economic activities outside the green zones remain frozen, there is a high chance that roughly 400 million workers out of the 467 million workers in the workforce could slip below the poverty line.Barclays in its April 2020 report, mentions that the lockdown is responsible for a loss of Rs. 35,000 crore per day for the Indian economy. In another study by Saini and Khatri (2020), using National Sample Survey (NSSO) data, it has been shown that an expected 20 crore households lying between the fourth income decile and the tenth income decile is set to lose something between Rs 65,333 crore to Rs 1,30,000 crore per month on account of the lockdown and the overall loss for the economy will be amounting to nearly Rs 18 lakh crore.Using the NSSO’s 68th round survey data on monthly per capita consumption expenditure (MPCE), it has been found that the government requires at least Rs. 19,000 crore per month (roughly Rs 320 per person per month) of direct cash transfers so that the people below the poverty line in all states (data for Telangana is not available) can come back to their pre-Covid-19 levels of MPCE. In a country going through a massive employment crisis, in-kind transfers and structural monetary policy reforms are not enough to generate demand. Even in the Atma Nirbhar package there is nothing by way of a direct cash transfer (consistent with the concept of universal basic income) for the bottom half of the population as is being emphasised by noted economists like Abhijit Banerjee, Kaushik Basu and Raghuram Rajan among others. Economic activities have to start keeping the social distancing norms in mind. Otherwise, the health pandemic might soon become an economic pandemic of sorts.Challenges Implementing expert advice on the exit strategy effectively is not easy in a country of 1.3 billion, where widespread inequality, poverty, and malnutrition are deeply rooted in the system. There are also biological, technical, economic and logistic reservations that require utmost caution in putting together an optimal exit strategy.Affected individuals who test positive with a serological test may still carry the virus and infect others for a certain period of time. Only those who test positive with a serological test and negative with a RT-PCR test should be allowed to return to work. The combined use of the two tests along with ensuring pool tests need to be carried on in the containment zones. Introduction of the Arogya Setu App for digital tracking of Covid-19 cases is a welcome move. But out of the 1.3 billion, a little over 450 million have smart phones and out this 450 million, only 90 million have downloaded the app till May 5. On top of this, the fear of privacy intrusion and data security from downloading the app is a concern.On the economic front as state finances have dried up, there is a call for more support from the central government apart from the Rs 110.92 billion already released to the states under the State Disaster Response Mitigation Fund (SDRMF) for 2020-21. At this point of time, freezing of the central government’s expenditure on the ‘Central Vista Beatification Project’ amounting to Rs 20,000 crore and on the bullet train project of Rs. 1,10,000 crore may be planned. The thus utilised fund may be used for development of health infrastructure, providing more PPEs and testing kits in the country.A major logistical challenge lies in chalking out a plan for allowing metro, bus and train services within the state and allowing inter-state buses and trains to run smoothly keeping social distancing norms in place. As is evident, the country’s existing public transport infrastructure cannot meet the current demand while ensuring social distancing. Moreover, it is unrealistic to expect everybody to have access to private modes of transport. Given the average density per square kilometre, expansion of the fleet of metro rails, buses and trains coupled with an increase in their frequency in all metro cities is the need of the hour.However, one needs to understand that there will be a new normal having multiple challenges where repercussion effects will continue from sector to sector in the post lockdown phase. So, the policy imperative needs to evolve over a period of time in line with the challenges that come up.The writer is a faculty of the Department of Economics, Faculty of Commerce and Management Studies, St. Xavier’s University, Kolkata