📰 Lives and livelihoods: On economy after lockdown
Centre must spend more, forego tax revenues to protect livelihoods during lockdown
•The government is in the process of applying its mind on whether it should extend or lift in phases the 21-day lockdown that ends next week. The choice for Prime Minister Narendra Modi now, as when he decided to impose the lockdown on March 24, is the same — between saving lives and ensuring livelihoods. He rightly privileged the former over the latter then. But as India nears the end of the lockdown period, the serious damage to the economy and livelihoods is beginning to make itself apparent. There is tremendous pressure from industry bodies to opt for a nuanced policy that will help economic activity to restart as they fear a collapse if activity is stopped for another fortnight. Lives could be lost to hunger and livelihoods sacrificed in the lockdown. One way to sidestep this existential dilemma is by bringing on a second round of an economic relief package that goes well beyond the first both in terms of the financial commitment and the spread. Out-of-the-box ideas for delivering support and also for raising the required funds might be required. For starters, it is clear that the government should consign fiscal conservatism to the cupboard for now and go all out to spend and support the economy. Economists are unanimous that there is little option now but to print money and spend. That is exactly what the developed countries are doing.
•The ₹1.7-lakh crore package announced by Finance Minister Nirmala Sitharaman on March 26 was a good start but barely accounted for 1% of GDP. India should spend at least 5% of GDP for now — about ₹10-lakh crore. The cash transfers to the poor should be hiked to at least ₹3,000 a month for the next three months. This should be in addition to free rations and cooking gas, as was announced earlier. In the harvest season, farmers need logistical support for moving their produce to markets. Lenders, including NBFCs, should be granted freedom to reschedule their loan accounts so that borrowers are not under pressure to repay for fear of turning delinquent. A credit guarantee fund that will support non-delinquent borrowers for the next six months will be a good option. Such a fund can be financed through a domestic bond offering. The bankruptcy code should be suspended for the next six months, at least for MSMEs. And why not a GST holiday for the next three months? The loss of revenue will be ₹3-lakh crore at worst, but in reality will be much lower than that because economic activity is at a standstill now. Such a move will ease cash flows for business and also obviate the need for statutory compliances at a time when the focus will have to be on getting businesses back on track. The crisis now is without precedent and the solutions cannot be conservative. Generous support from the government, and quickly delivered, is the need of the hour.
The ability to quell the epidemic is linked to political will and professional skill shaping a multi-sectoral response
•When will we move COVID-19 from a tense present to past tense? That question hangs perplexingly and lies posed before an embattled world and an anxious India. As we look to the possible end of the 21-day national lockdown, what next? Is there an early timeline for return to normalcy or will we have to wait for years to regain the vigour and the vitality of life as before in a reconnected world?
Self-reliance is the way
•India has to chart its own strategy, whether it is in planning a staged release from the lockdown or in developing domestic capacity for medical equipment. There will be a need for scientific and economic cooperation with the rest of the world, but self-reliance is the rudder that must steer our ship as we sail through these rough seas. Globalisation lies shredded as we read of French and German officials protesting at the Americans seizing shipments of masks that they had ordered from China, in what is being called “guerre des masques” (war of the masks).
•For charting our course ahead, we have to answer several questions. Did the lockdown benefit us and will we gain further by extending it fully or partially? Will we be in a position to gear up the capacity of our health system for effective public health and health-care responses across the country within the next few weeks if there is a surge in cases? How can we triage our response strategies to best use our limited resources? Are there favourable factors which suggest that India will have a less extensive spread or a milder manifestation of illness? What kind of partnerships need to be mobilised in the country to develop and deliver an effective response?
Moving forward
•The impact of a three-week lockdown on reducing infectivity cannot be gauged well till the third week because the virus has an incubation period that can extend up to 14 days, though the vast majority of cases clinically emerge by 11 days. Whether there are already infected cases that will spread outdoors after the lockdown will be gauged by clinical criteria (syndromic surveillance) and testing (using viral or antibody tests as indicated). House-to-house surveillance being implemented in Andhra Pradesh, even during the lockdown, involves accredited village and block level volunteers partnering front line health workers to identify symptomatic persons for later visits by medical teams. The involvement of designated volunteers and community-based organisations can greatly enhance case detection, isolation, counselling, severity-based care and social support. Potentially favourable factors for India are the younger age profile and a higher rural proportion of our population compared to China, Europe, the United States or other highly affected countries whose populations are older, urban and highly mobile. However, this enjoins us to energetically protect the elderly and rural segments of our population. Restricting urban to rural movement to essential goods and essential needs, for at least six weeks after the lockdown ends, will help. The health, nutrition and financial security of the poor must be ensured. Elderly persons too should observe social distancing and limit visits outside home for this period. Essential economic activity can be resumed in stages.
•We would be entering June by this time. By then, we should have a better picture of the spread and severity of the epidemic in different parts of the country. That would need a greater level of testing to detect both asymptomatic and symptomatic persons who have been infected, through random population sampling in different parts of the country. We should quickly gear up our testing capacity to meet this mapping mandate. Hotspots should be identified, based on numbers of self-referred symptomatic cases, persons identified on home visits and population survey results. These should be ring fenced, with intense search for contacts and active spreaders, with further localised lockdown as needed.
•The height of summer in June may also give us some respite, if not full relief. There is some evidence that this virus too, like other coronaviruses, is likely to wane in hot weather. Other suggestions, of protection from malaria endemicity and past BCG vaccination, are speculative and based on correlation studies which do not qualify for inference of causation. Crowded living conditions and propensity to have myriad mass gatherings, for political, religious or social reasons, can be our undoing if we do not enforce discipline.
•Even if some factors favour us, our ability to quell the epidemic will depend on how well political will and professional skill can shape a coherent, countrywide multi-sectoral response. Think of it as a game of cricket. Even if the pitch conditions favour us, we still have to play well to win. If COVID-19 is the batsman scoring freely, the health system is the bowler trying to tie him down and get him out. Full support is needed from the other sections of the government who form the close-in field and the citizens who are guarding the out-field. Everyone has to be on their toes, avoiding a poor health system response (loose balls), supply chain delays (dropped catches) and social distancing violations (misfields). No huddles please!
Focus on health services
•We also need to make sure that our health-care system provides timely and competent care to all who need. Primary health-care facilities, district hospitals, public and private tertiary care institutions have to gear up with equipment and augment human resources drawn both from trainees and retirees. Considering the higher risk to older health-care providers, the first line of care should be formed by younger staff members who will have milder effects even if infected. The older staff members can provide supervisory support. This will prevent attrition of the health workforce due to exhaustion or illness. Temporary hospitals for treatment and isolation facilities for persons on quarantine may need to be set up at short notice. Industry must produce essential medical equipment and drugs to meet our needs and, if capacity permits, assist other countries.
•This has to be our game plan, with flexibility to change the field settings and bowling options as we reassess the situation periodically. Let us get going, to win this match as Team India.
