Devendra Kothari, Ph.D
Population and Development Analyst
Forum for Population Action
Should
India care for COVID-19 by imposing restrictions like lockdown or allow the economy
to grow? This is a difficult catch-22 situation. The Post (117) argues that restricting
economic activities beyond a point will push the cases of Covid-19 and its
related consequences.
Even after around 100-day of continuous total lockdown and
a curfew like situation in the entire country, we are not in a position to say
that these measures were successful in containing coronavirus. Table I
indicates that in spite of the stringiest lockdown in the world, India has
recorded a quantum leap in the new coronavirus cases, as
revealed by the official data. The
average number of cases increased from 531 per day during the Lockdown-1 to
6786 in the Lockdown-4. In June itself, the average number of daily cases
jumped to whopping 13,173. Similarly, the
number of deaths increased from two on March 25, the first day of lockdown-1,
to 506 on the last day of Unlock-1 that is more than 250 times in around 100
days.
Table 1 Total coronavirus cases and deaths in India since Lockdown-1
Phase (Dates)
|
Total new cases
|
Cases per day
|
Total new deaths
|
Cases per day
|
Lockdown-1 (21 days)
(March 25 to April 13,
2020)
|
10,951
|
521
|
383
|
18
|
Lockdown-2 (19 days)
(April 15 to May 3, 2020)
|
31,018
|
2,216
|
998
|
71
|
Lockdown-3(14 days)
(May 4 to May 17, 2020) (14 days)
|
53,193
|
3,799
|
1,634
|
117
|
Lockdown-4
(May 18 to May 31, 2020)
(14 days)
|
95,000
|
6,786
|
2,383
|
170
|
Unlock-1 (June 1-30, 2020)
|
3,95,183
|
13,173
|
12,002
|
400
|
Source:
Worldometer Coronavirus at: https://www.worldometers.info/coronavirus/country/india/
|
||||
And, this has happened when India did not allow any large scale
gatherings since the imposition of lockdown. All kinds of social, political,
sports, entertainment, academic, cultural and religious congregations have
remained suspended.
Looking
to these trends, one can conclude that India is not a suitable place for lockdown
which is based on the social distancing given its settlement patterns and
congested and unplanned urban areas dominated by slums. 13 cities accounted for 70 per cent of the
total COVID-19 cases in the country at the end of the Lockdown-4, as per the
MoHFW. These cities are: Mumbai, Chennai, Delhi/New Delhi, Ahmadabad, Thane,
Pune, Hyderabad, Kolkata/Howrah, Indore, Jaipur, Jodhpur, Chengalpattu and
Thiruvallur (Tamil Nadu)
Further,
it is difficult to understand why the
lockdown was imposed on the entire country.
It is worth noting that those large
countries that have so far done a relatively good job of containing the
coronavirus pandemic have refrained from imposing a complete, nation-wide
lockdown. Even China, where it all started, placed only the Hubei
province under complete lockdown, not the whole country like India. This
precipitant step has distrusted the supply chain line and manufacturing
unit.
The
current financial year ended on March 31, 2020, for which a GDP growth of 4.2
per cent was announced. India went into a lockdown at the end of March so the
effects of the stay-at-home order will only be fully visible by Q1 of the new
fiscal year. It can be seen from the Gross Domestic data
(Table 2) that the economy had already been weakened by years of mismanagement
before this crisis struck. It was largely on
account of demonetisation (November 8, 2016) and GST (July 1, 2017)
implementation led turbulence.
Table
2 Trends in Gross Domestic Product, 2008-2020
| Financial Year |
GDP Growth (%)
|
Annual change (%)
|
| 2020 |
4.20
|
-1.90
|
2019
|
6.10
|
-0.71
|
2018
|
6.81
|
-0.36
|
2017
|
7.17
|
-1.88
|
2016
|
8.17
|
0.17
|
2015
|
8.00
|
0.59
|
2014
|
7.41
|
1.02
|
2013
|
6.39
|
0.93
|
2012
|
5.46
|
0.22
|
2011
|
5.24
|
-3.26
|
2010
|
8.50
|
0.64
|
2009
|
7.86
|
4.78
|
2008
|
3.09
|
-4.57
|
| Source: Ministry of Statistics and Programme Implementation, GoI. |
||
Whether
the lockdown was able to save lives or not it is not clear but it has further
damaged the economy which was already in the poor shape. Economist Jean Drèze stated that the lockdown had
been "almost a death sentence" for the underprivileged of the
country, in an interview with News18. He went on to say, "The
policies are made or influenced by a class of people who pay little attention
to the consequences for the underprivileged" [1]
The
coronavirus has taken 17,140 lives during the lockdowns and Unlock-1 period,
according to official figures. But depending on the way deaths are counted, the
real human cost could be far greater. That may be the reason why Prime Minister
Narendra Modi extended until the end of November his government’s scheme to
provide free food grains to 80 crore or 800 million poor in the country.
In short, as if a corona pandemic and a severe economic
recession weren’t enough, we now have a dangerous Indo-China border
conflict. So what India
should be doing in containing the coronavirus pandemic and revive the economy?
Consider the COVID battle first: Nobody knows about the future of neither COVID-19 nor
vaccine/treatment regime. However, the sharp increase in positive cases has led
experts/investors to worry about renewed broad lockdowns with large negative
effects on the economy. But there are also other ways to reduce infections,
including stringent bans on large gatherings and greater use of face masks. Further, WHO has acknowledged wearing mask is a must to
protect from COVID airborne transmission.
Based on the recent research,
Lancet suggests wearing masks properly could achieve substantial reductions in
the spread of COVID-19 without the need of for the strict nationwide lockdowns
of the kind virtually brought all commercial activity to a halt, resulting in
massive economic losses and lives. [2] Jan
Hatzius, head of Goldman Sachs Research and the chief economist, reported: “We
find that face masks are associated with significantly better coronavirus
outcomes.” It is, therefore, wearing a mask in
proper way in the public places should now be made mandatory. [3]
In addition, India’s medical facilities are limited.
Its density of doctors of 8 per 10,000 people is lower than that of even
Silence (10/10,000) but nothing to China’s 20 or America’s 26. Had the
infection numbers grown here into millions, its healthcare system would have
struggled?
The
number of COVID-19 cases recorded per day in India may surge to
287,000 by early 2021 if a vaccine or treatment isn’t developed soon,
researchers from Massachusetts Institute of Technology (MIT) warned in a recent
study. [4]
India has to follow a different regime of
treatment. It is, therefore, proposed
that those who are elderly and frail, and who happen to have diabetes and other
health issues, should be given preference. The asymptomatic cases could be treated
at community clinics/homes, as noted by Sunetra Gupta, professor of theoretical epidemiology at Oxford.[5]
As far as the management of COVID-19 is concerned, it is
becoming clear that the whole process should have been driven by a group of
epidemiologists, doctors and social scientists and not the bureaucrats in
Delhi.
Moving on to the
management of the economy: Not Mask alone can push the economy
and lower the risk of coronavirus, one has to take specific measures to revive
the economy to generate resources to manage the pandemic. My recent work
suggests the following ten steps to create the enabling environment for
reviving the economy:[6]
First, the current
pandemic has forced us to think about the plight of workers in India. It has
enhanced public awareness of the pivotal role of migrant workers in our
economy. We have been completed to release that more than 140 million people
leave their villages including small
towns, families and homes to find
work far away wherever they can find it;
their invisible hands harvest the crops and feed us, clean streets, run
factories, build roads, construct our houses. In fact, they are the backbone of
India’s economy.
We have to boost the confidence and morale of the migrant workers.
A regime of social security must be installed to meet the basic needs of these
workers including housing all times – not only during the pandemics and riots. [7] In
addition, resuming public transport is
one of the organic solutions to the current travails of migrant worker
movement. Once regular services start, migrants will be secure in the mind that
they can leave when they wish. It will ingrain the perception that normalcy is
fast returning with employment opportunities in places of destinations.
Second, the agricultural sector has been
facing a number of problems. One cannot resolve
these problems without absorbing at least two-thirds of those dependent on the
farm in non-farm jobs. Further, India needs
to create 10-12 million jobs every year in the coming decades to provide
quality of life for its growing population.
Third, in India, capital is
scarce and labour abundant. The Micro, Small and Medium Enterprises (MSMEs) are
thought to have lower capital-output and capital-labour ratios than large-scale
industries, and therefore, better serve growth and employment objectives. Not
only do MSMEs generate the highest employment per capita investment, but they
also go a long way in checking rural-urban migration by providing people living
in isolated areas with a sustainable source of employment.
Fourth,
India has to improve the basic infrastructure with special reference to the
uninterrupted cheap power supply to generate non-farm jobs. Moreover, emphasis should be on renewable energy since
its production can be decentralized and this will be a great help in promoting MSMEs
even in the remote areas. Moreover, solar and
wind power now cheaper than coal. [8]
Fifth, ease of doing business (EODB) is to facilitate the domestic
producers as well as foreign. Do we have the
needed institutional framework for ensuring that skilling, productivity,
technology development are on par with countries like China or even Thailand
and Vietnam? Do we have enough technocrats in the governance system as
ministers, bureaucrats to enable the processes? It
is interesting to note that of the 56 companies that moved bases from China in
2018-19, the World Bank found that Vietnam got 26, Taiwan 11, Thailand 8 and
India 3. Now the “shift” sentiment favours us even less.
Sixth, the
economies which have peaceful environment accumulate more physical and human
capital accumulation and enhance to economic growth rapidly. Here the
issue of communal harmony is very important to attain economic growth. India should not raise controversial issues like the
Citizenship (Amendment) Act, 2019, which disturbs the harmony and creates an
obstacle for economic development. The Government of India should either repeal
CAA in its entirety or put the CAA/NPR/NRC in cold storage.
Seventh, India
has to create conditions for the demand generation in order to create jobs.
This would require changes in labour and land laws, cutting corporate and
general taxes to the level of East Asian countries. Further, the pay and
pensions have soared in the public sector as compared to the private sector. Such irrationality can’t last when the
economy in turmoil. COVID-19 should be
used as an opportunity by the government to correct its mistakes – roll back
excessive salaries/pensions of government employees and provide tax relief to
the middle class to generate demand.
Eighth, for India to emerge not from the
corona crisis but also to revive the economy there is a need for greater
dialogue in a federal setup. It is because India is a big and diverse country. So we can’t have one monolithic one size fit all
economic models. What suits the northeast will not fit in south India. What
suits Bihar will not suit Maharashtra. In addition, real change comes about
when the states are involved in the decision-making process. It is therefore the decentralization should be
the base for economic planning.
Ninth, India needs smaller states for
better governance, an essential requisite for economic development. There are 28 states in India at
present. Their
populations range massively in size – the largest, Uttar Pradesh, holds
around 200 million people, the smallest, Sikkim, just over
half a million. About half of
the country's population lives in five States, namely, Uttar Pradesh, Maharashtra,
Bihar, West Bengal and Andhra Pradesh in 2011; and ten most populated states or
super states of India contribute more than three-fourth of India's population . The 2021 Census will
reveal an unmanageable picture of population in these states. For example, the
Uttar Pradesh population may be more than 250 million in 2021.
As such, there is a widespread perception that splitting super states
into smaller ones will improve administration and governance by bringing power
centres closer to the people, thus paving the way for rapid economic development.
Finally, the
structural reforms, as discussed above, are important in generating employment
and creating an enabling environment for economic development; but for
sustained growth, the issue of labour productivity is a must.
Labor productivity measures
output per labor hour. It is largely driven by investment in physical capital,
technological progress, and human capital. The government can enhance labor
productivity by investing in infrastructure, technology and human development. [9]
With technology changing the nature
of work, and India’s population expected to reach 1.7 billion by 2050,
investing in human development has never been more critical. It is argued that investment in people
(especially poor) early, often, and at the household level, can lay the foundation
for human capital formation that will enhance productivity.
To start
with, India must focus on essential components of human development in a more
closely integrated form. These are:
1.
Improving
the quality of elementary education,
2.
Facilitating
water and sanitation,
3.
Enhancing
primary health,
4.
Reducing
the gender gap, and
5.
Stabilising
population.
In essence, the above reforms will
provide a better option to build an efficient, globally competitive economy not
only to manage the pandemic but also prepare India to reply the Chinese
aggression in a language they understand.
In Conclusion, India should rapidly ease the COVID restrictions
to revive the economy. Otherwise, it may suffer the worst of both worlds —
economic collapse without checking the virus. At a Princeton University webinar – The
Economic implications of COVID-19 - on July 10, 2020, economics Nobel laureate
Angus Deaton did not mention India by name, but he highlighted the danger of
poor countries getting the worst of both worlds.
In short, saving the economy saves lives.
[1] Read
more at: https://www.news18.com/news/india/lockdown-labour-pain-the-demand-for-mnrega-work-has-never-been-so-strong-says-economist-jean-dreze-2600383.html
[2] Source: ResearchGate, Lancet, Health Affairs,
Nature, Axios, media reports.
[4] Read more at: https://www.business-standard.com/article/current-affairs/india-may-see-2-8-mn-covid-19-cases-a-day-by-winter-2021-mit-study-120070800330_1.html
[5] Read more at: https://timesofindia.indiatimes.com/blogs/the-interviews-blog/we-cannot-look-at-this-epidemic-as-a-single-axis-of-how-many-people-are-going-to-become-infected/
[6] Kothari, Devendra (2020). A strategy for new India: Effective measures for the rapid economic
growth, FPA Working Paper #21, Forum for Population Action, Jaipur.
[8] Read news item: Solar and wind power now cheaper than
coal (June 25, 2020) at: https://www.evwind.es/2020/06/25/solar-and-wind-power-now-cheaper-than-coal/75326
[9] Kothari, Devendra (2019). Nurturing Human Development: A Strategy for New India, New
Delhi: Paragoan International Publishers.
