Vicious Circle of Inadequate Containment and Economic Freefall
The country has been receiving blow after blow apart from the pandemic itself
With the fourth successive phase of lockdown unlocked, the number of confirmed Covid-19 patients crosses new benchmarks every day, and the problems remain the same: a downward spiralling economy and inadequate containment, which completes the vicious circle by making the lockdown ineffective and only stalling the inevitable.
On May 19, the spike in confirmed cases was a whopping 5,611, then the highest for a single day. The number of confirmed cases, which was 468 before the lockdown was announced, has surpassed one lakh, while the Covid death toll has spiked from 8 before the lockdown to over 3,100.
These numbers make it clear that the 58-day lockdown implemented by India has been a complete failure. We now have more Covid patients than all but ten nations.
As our governments embark upon a phased exit, with the country divided into green, orange and red zones, it is imperative to remind ourselves that the lockdown is no solution, but only a means to slow down the spread of infection. There must be measures to guarantee that the green and orange zones, which are relatively safe, remain that way.
Any talk about the capability of our medical and healthcare system has not been pleasant, for forever. There is a dearth of every element required to successfully operate the system in rural and urban areas: be it hospital beds, ventilators, personal protective equipment, medical workers, hospital rooms or hospitals themselves.
The lockdown was also meant to help prepare hospitals to deal with the virus. However, any preparedness for the speculated, incoming next phase/s of the pandemic is sorely missing.
Although the pandemic is at the Centre of everyone’s attention, there are still diseases, some equally fatal, which need proper consideration and treatment all the time. Therefore, an upgrade of the medical system needs to take priority in the current scenario as well as in future.
If the central government is serious about improving health and medical services, a core management team, assisted by similar forms of organised groups at every level from every Block to every District to every State, needs to be formed and put in charge of coordinating and mapping all essential health services in the country.
Provisions should be made to ensure readily available access to healthcare for all. While protection against Covid-19 is of importance, the same should not cause disruption in the treatment of other medical conditions which are just as prevalent everywhere. Indians deserve a new health policy.
Reliable rapid testing kits and essential equipment need to be procured and procured fast. More funds should be allocated to address the weak links in the packages announced by the Centre. In the absence of adequate testing, one cannot truly estimate the spread of Covid-19, but it may not be false to say that fear of the contagion is more widespread than the contagion itself.
India remains among the countries with the lowest rates of testing per million patients. The low testing rate serves as evidence of serious problems in India’s Covid-19 response. With just 27 lakh tests conducted for a population of 130 crores, followed by a relaxation of restrictions in the ‘orange’ and ‘green’ zones, there is a hesitation on people’s part to rely on public transportation – in fact to every aspect of the 20 lakh crore package announced by the Centre, bringing the situation back to square one.
The example of China and other nations shows us a better way. To encourage confidence among the masses, the authorities have done away with road tolls, transport taxes and made travel by metro and buses free of cost, bringing mobility back. Guarantees of a safe and healthy travel environment need to be obtained from the government to boost people’s confidence, which it has failed to provide, especially to migrant labourers.
The transport sector has already run up huge losses which it cannot make good without governmental assistance, especially since physical distancing will limit ridership. The rapid transit system in Indian cities is not wholly free of instalments they can afford to be behind on, with even the Bangalore and Delhi Metro corporations facing potential inability to follow through with their repayments to the Japan International Cooperation Agency.
The aviation industry has been hit extremely hard by the Covid-19 crisis. Airlines are at a loss and if leisure travels do not resume for at least another year, airlines will have a tough path to recovery. Several European nations, recognising the industry’s importance to their economies, have announced assistance plans. The USA has provided financial support amounting to $12.4 billion to its affected airlines and this is only half the package promised to be given out by July.
Therefore, in the post-Covid world, some airlines are expected to surface while others are not. Thai Airways has already filed for bankruptcy. Which category will the Indian airlines fall in?
The Centre must extend financial support to help recover the transport and civil aviation sector by providing a fixed subsidy to airlines. Vacancies created by the need to adhere to physical distancing should be subsidised and relieved by waiving taxes and other obligations. This should only be the beginning.
India’s restaurant industry is facing what is possibly its worst existential crisis. While the lockdown reduces the risk of transmission, it has also meant that revenues have dropped to zero, with businesses struggling to find the cash to pay their employees and rent.
“In the hospitality business you cannot take human interaction out of the equation,” says Priyank Sukhija, MD and CEO of First Fiddle F&B Pvt. Ltd. “Unlike the IT industry, we cannot work from home. And if you leave aside delivery and cloud kitchen services, social distancing cannot be practised. However, the tourism and hospitality/ restaurant sector found NO mention in the government’s relief package.”
On May 12 the PM announced a 20 lakh crore package saying that farmers, labourers, skilled and unskilled labour, unemployed, urban workers and those employed in MSMEs would be the beneficiaries. However, the Left parties said the economic package announced by Union Finance Minister Nirmala Sitharaman failed to address people’s immediate concerns, describing it as a “farce” that propagates the policies which led to an economic crisis in the first place, even before the onset of the coronavirus pandemic.
When the ruling government unveiled the breakup of the economic relief package it raised more questions than answers. PM Modi proclaimed that the package’s chief focus is to help small businesses, labourers and farmers and following this the FM exhibited details of the fiscal incentive in five tranches. Despite these declarations, international agencies have rated the package to amount to less than 1% of GDP, with much of it already presented in the Union Budget of 2020-2021.
Among the big initiatives were an unprecedented 25% increase in FDI in the defence sector, and removing the government monopoly on coal and mining. Another proposition was the easing of restrictions on Indian airspace, the privatisation of ALL sectors and the weakening of labour laws, the opening up of seven space-sector PSUs including ISRO and nuclear-sector PSUs including ECIL for privatisation.
But ALL of this has nothing at ALL to do with the migrant labourers’ problems, or the problems of ordinary people during this pandemic. The success of a government’s economic policy can be evaluated by the Sensex industry and the share markets – which crashed after the announcement of the package. This downfall of the stock exchange hasn’t been fruitful in any capacity for businesses and does not instil confidence in the people.
All announcements made by the FM for the so called ‘stimulus packages’ will require the approval of Parliament as all ordinances require ratification by Parliament and the state assemblies where they are applicable.
One can only hope that the People of India received the decisive message: if it has been announced in their favour or in favour of the country’s capitalists. Parliament and the people will examine it. Meanwhile, economically, the situation continues to worsen…
The government’s proposed reforms seem to be long term and do not address the present situation whether of migrant labourers or large scale industries that have seen zero revenue in May. The packages lack immediate reform and there is no protection of wages or equity support from the government.
The Centre needs to focus on demand and put money in the hands of people and businesses like other world economies. As of now, it seems it is expecting people to take loans, increase liabilities, save less and eat out of their own savings and turn the loans into NPAs later. Whereas this was the right time to print currency and bring it into the economy.
Aside from feelings of fear and uncertainty, the public is now embracing impatience. People have stayed at home for 54 days, they have clapped, lit lamps, they have seen helicopters showering flowers and naval ship formations. But what they have not seen is where public money is being utilised, and where the thousands of crores of rupees contributed to funds are being invested.
The MP Local Area Development Funds have been abruptly cut off without serious thought. These funds, which every Member of Parliament and Member of Legislative Assembly in the states is allocated for the management of their respective constituency, could have been used to ease the situation on the ground in every MP and MLA constituency countrywide.
Now, there is NO involvement of political workers at the ground level.
Additionally, the Centre has waived the bad debt of 50 defaulters: unpaid loans amounting to 68,607 crore rupees. The criteria for selecting these 50 defaulters can hardly be valid in any scenario. Or are we being told that the unpaid debts of some are more acceptable than those of others?
One of the consequences of imposing a countrywide lockdown with only four hours’ warning was that it prevented migrant labourers from returning to their homes, unlike countries such as Bangladesh or South Africa who gave 4-7 days’ advance warning. India emerged as the only country in the world where a lockdown was imposed wherein migrant labour revolted en masse to return to their homes on foot.
40 million migrants walking makes it the largest migration in human history, a tragedy that dwarfs even what was seen during the country’s partition. Besides the pandemic, India now battles a self-inflicted refugee crisis!
Since the lockdown began, workers, rendered jobless overnight, have been running away from the cities which they no longer see as havens of opportunity. Some have said they will not return; they will make do with whatever little they have in their villages.
With more than 300 people dying on their way home, “Orphaned by the system and left without wages or work, labourer after labourer, in state after state, told me that if confronted with death, they would rather die at home, with the people they loved,” said a senior journalist.
Later on, acknowledging the atrocities perpetrated on these penniless migrants dismissed from their jobs, the government decided to reopen certain transport facilities, despite which numerous migrants resorted to walking their way home because they didn’t have enough money to pay for the transport on offer.
Migrants constitute some 30-40% of the economic output of many Indian cities. You cannot run the economy without them. You can reopen industries, but how will they function without migrant workers? Having triggered a mass exodus from the cities by imposing sudden lockdowns without a plan, the Centre now finds itself crippled to kickstart the economy.
India has somewhere close to 20 million international emigrants, half of whom live and work in six Gulf countries: Qatar, Bahrain, Oman, the UAE, Kuwait, and Saudi Arabia. Many of these countries had been pressuring India to take back these workers; the workers too had been pressuring the government to make arrangements for them to return home. The Centre had little choice but to arrange their transportation, with the evacuations now in progress.
One of the fallouts of reverse migration, local or international, is the unbridled spread of the virus to all nooks and corners of the country. For example, of the 835 samples taken from migrant workers who returned from Delhi, as many as 218 were Covid-19 positive. This works out to a detected infection rate of over 26%, while the rate in the national capital is about 7%.
There are important questions for our representatives in power to answer. The most important one is whether they will answer in time.
Migrant workers’ recent experience and their fear of the virus will most likely keep them from returning to work and may lead to the collapse of the labour industry. Many are comparing their plight to their ancestors’ when Partition took place and so many crossed the border walking.
Governments together with these workers’ employers should have monitored and regulated the movements of labourers through the many hundreds of Food Corporation of India offices and godowns across the country, ensuring the supply of free foodgrains to these citizens at their work locations, thereby reducing the risk of losing lives and spreading the infection.
Did any governing body even think through the consequences of the sudden lockdown? Will the government gain the appalled migrants’ trust and lure them back to work as the lockdown restrictions are gradually eased?
The Centre’s latest, ‘Vocal for Local’, rhymes well and ‘Atmanirbhar Bharat’ [Self-reliant India] is good. But both mean the same thing: Make in India. The manufacture of ideas has fallen far behind the invention of slogans, and this particular idea remains as wrong as it was half a century ago.
India punishes the import of consumer goods; they are mostly made in India. Services are also kept out. And imports of equipment and industrial inputs actually help Indian industry. Making them in India would make it even less competitive.
This time, too, the PM could not resist his love of alliteration: land, labour, liquidity, laws. What about them? What do they have in common? What will he do to them?
If the reforms of the last six years have made the economy more resilient, why was it in such trouble even before the pandemic? If the Centre wants to make Indian firms adopt efficiency and quality and prepare India for competition in the global supply chain, well, the industrial protection this government has introduced in the past six years has done precisely the opposite. But not a word from PM Modi about dismantling it.
The so-called package announced by the Centre has rightly been called ‘a headline with no details’. Those who urgently and immediately need help are walking hungry on the roads or looking for a meal from somewhere. It is completely insensitive to the existential crisis being faced by crores of Indians.
In a predicament such as this, it is understandable worldwide that the primary responsibility of governments is to formulate schemes which make sure the country’s citizens are provided with basic necessities like food, shelter, income and medical care – but in this lockdown, which has now lasted for almost two months, all citizens are living in a constant state of mayhem. Even our medical workers are still not well equipped with the means to carry on proper investigations.
Meanwhile, 200 ventilators are being “gifted” by the USA while Indian companies still await a nod for manufacturing the same. The status of ventilators being manufactured by Indian companies is still unknown… is an official go ahead still awaited? When the PM-Cares fund has already provided for them, will the Government of India say no to Mr Trump and not pay for it during the current crisis situation?
The larger question remains whether the figures allotted by PM-Cares will ever reach the ground or be played by officials without audit, yet again.
We are witnessing the pettiest form of politics from the government at the Centre. There has been nothing for the various state governments which have been asking for funds, as they are at the forefront of fighting the epidemic. There has been nothing for them, not even their legitimate dues.
It is no secret that the country has been receiving blow after blow apart from the pandemic itself, and disorder prevails. In the midst of this pandemonium await the upcoming elections in Bihar, Assam and West Bengal, which will be followed by Puducherry, Tamil Nadu, Kerala and J&K. Their results will most definitely be affected by all the events that have occurred in this short but significant span of time.
Madhukar Jetley is a member of the Uttar Pradesh state legislative council