By S NARENDRA
(Former Information
adviser to PM/PIO Govt of India)
The Government of India has done well to declare the
threat, an existential one, posed by the global Corona virus -19, a national
disaster. There could be two opinions about the adequacy
of the measures taken so far to protect the people
against the CV-19 pandemic. It is well to remember that the pandemic has
overtaken the seven continents with least warning and overwhelmed most countries’
governments. The countries with enormous financial and health -related
resources are finding it difficult to cope with the CV-19 challenge.
It is a time for citizens to proactively support
the official measures by following the guidelines stipulated regarding personal
hygiene and social distancing. The latter is a tough call in a densely
populated country like India where people live cheek by jowl. The burden of keeping
the Virus away largely falls on the individual and the family, calling for a
total transformation of human social and personal behaviour. As of now the government’s attention is concentrated
on putting in place policies and programmes to control the virus
spread and on mitigating the pandemic‘s adverse effects on
the economy and people’s livelihoods.
The Indian government, like many others such as China,
USA, Britain, and, the European Union, is contemplating fiscal and monetary measures
to stimulate the economy. As many economists have pointed out, the economic
theory has no answers as it has never faced, nay never contemplated, the
dislocation of life caused by CV-19 pandemic. It is outside the Demand-Supply framework
(the invisible hand of market forces) of the discipline. A noted American economist,
Tyler Cowan, in a recent online post wrote that basic economic concepts like ‘inflation’ are no
longer useful when the toilet and facial tissue paper, sanitisers, soaps, face
masks become more valuable than the commodities in the normal basket of goods whose
prices are studied for measuring inflation, and adjusting lending
interest rates.
The Union and state governments are now required
to deal with a hydra-headed problem on an emergency basis. The CV-19 has arrived on the back of an economic
slowdown, that had drastically reduced the government revenues. The shut-down
of vital economic activities in most sectors due to the pandemic will
inevitably further dim the governments’ revenue outlook.
It is a double whammy because now the governments are required to deal with a many-headed
problem with massive resources. Considering the enormity of the challenge, the
governments will do well not to rush out for bailing
out businesses which are making the most noise. Perhaps, the outlines of the
economic and social challenges are yet to emerge fully for thinking of a measured
response. The world, including India , seems to be headed for the long haul.
There are likely to be some unintended
consequences from the on-going ‘National Disaster’ which may need to be reckoned
by policy makers. Such consequences are studied under the title of Freakonomics
by some noted economists. CV-19 is exposing in both the rich and poor countries
the massive inadequacies in the health infrastructure, a key contributor to any
nation’s human resources. It will do a lot of good if the media and experts are
allowed to put the Indian public health infrastructure, and the economic model that
tilts it in favour of privatising health, to a lot of public scrutiny.
Perhaps, for the first time the nation will be X-raying
this sector, hopefully gaining the sector the priority it deserves in central
and state budget allocations. Many health sector experts have lamented that the
center and states governments combined expenditure on health is far lower than her
neighbours. The economist Joseph Stiglitz has pointed out that the trend of moving
away from public to private health care in India was pushing fast more people in
to poverty. The present situation is a
great opportunity for bringing back health care into the national political
agenda. Unfortunately, the gains in the health sector are post-dated, invisible
and offer less scope for political kickbacks that accrue from building physical
infrastructure. Hence, it tends to receive lip-service.
The COVID induced closure of educational
institutions again offers an opening for examining the deficiencies
of distance education and utilising the tremendous possibilities offered by the
technology for delivering quality educations and skills to the masses at less
cost. Its quality has to be improved vastly and used for improving the standard of
education imparted in government schools and colleges. The government, academia
and technology innovators need to be brought together to
collaborate in this sector. If the governments care to use a significant part
of the any stimulus money for the above two objectives, it would go to improve
India’s competitive advantage, encashing the available demographic dividend.
A third priority should be to bring relief to the
informal sector due to the shutdown. This sector provides the bulk of the employment
to about 472 million total workforce. The formal sector accounts for about 10 per
cent of the jobs but has more voice in policy making. The economic
distress caused to workers who have no job guarantees, no social security cover, is
unimaginable because of the shutdown. Going by the expert’s opinion, COVID
emergency could last fairly long. Announcements
such as facilitating more credit to SMEs are conventional solutions which may
not be adequate in this dire situation. The livelihood of the huge
number of wage earners whose only tradable asset is physical labour is under threat.
How to fulfil their basic food needs requires immediate attention.
One does not know whether the governments should consider opening something
like opening free soup kitchens. In New York, according to the New York Times
report, some 750000 school children were dependent upon the school provided one
daily meal. The shutting down of schools has deprived them of this daily meal. If
that is the situation in USA, imagine the plight of children of families in India
who have no daily regular wage -earning work. This is mentioned here mainly to
point out the enormity of the problems facing the polity.
There was a report that the air quality over
China had improved due to the COVID 19 induced lockdown. Ironically, the human caused
global warming effects will be less due to the global economic shut down. Every past year in this millennium has seen an
increase in global temperature.2020 may be an exception. This is one of the
Freakonomics effects. The policy makers, if so inclined, can draw some lessons
and build them into post-COVID policies. The CV-19 is compelling us to change
our social and personal behaviour. We have the option to resume our life
with business as usual in the post-
COVID era, leaving our fate, that of the
universe, to market forces and climate change. We also have the option, having
come out of an existential threat, to modify our life -styles defined by instant
gratification of wants and adopt a more environment sustainable life style. One
hopes that the traditional economic
theory hinged to consumption-based capitalism that shapes government policies listens to the
lessons coming out of the COVID crisis,
and its consequences for people whose life is on the fringes of the market
forces but who are vital to the overall
economy.
On the informal sector that accounts for nearly
half of India’s GDP and major portion of the employment and wage earners by the
necessary shutdown is unimaginable. The shutdown of most social and economic activities
necessitated by CV-19.
A very important point is that the challenge
posed by COVID -19 has to be fought at the
state, district and village level without the clash of political egos. In this
humbling moment in the nation’s history, the sagacity of leaders in Delhi and
the state capitals will be tested. It is a time to show a shared vision and resolve for infusing
confidence in the people that the political system is united in navigating them
out of the pandemic.
