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 other countries 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 states; 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 ongoing ‘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 percent 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 ratification 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.
-The author is a retired Principal Information Officer
Lead Picture: UNI