Enough of chest-thumping | Business Standard Editorials

Lockdown can’t be a substitute for quick action in other areas

Last Updated at March 26, 2020 00:55 IST

The nationwide lockdown is being touted as a necessary step to reduce the spread of COVID-19, given the surge in the infection and the limitations of the Indian health care system. But quarantine and social distancing alone is certainly not enough, evident from the comments made by the World Health Organization’s (WHO’s) top emergency expert who said in an interview that countries cannot simply lock down their societies to defeat coronavirus and that public health measures were needed to avoid a resurgence of the virus later on. In any case, a lockdown for three weeks cannot be used as a substitute for everything else that the government should be doing or should have done by now. India has tested a total of 12 people per million population; China has done 221 and others have done several thousand per million population. The pathetic state of the country’s general systemic/production/supply capacity (for example, India has one doctor for 11,600 people) tells us a lot, and should puncture all the chest-thumping that goes on. WHO has prescribed spending a minimum of 4-5 per cent of every nation’s gross domestic product (GDP) on health care. A government, which has been so proactive in imposing a nationwide lockdown with just a four-hour notice, has allotted a mere 1.6 per cent of the GDP in the Union Budget.

The other big issue is that the economic cost of the extended lockdown, especially for the poor, will be unprecedented — and the consequences unpredictable. The general inconvenience in terms of maintenance of essential services and supplies will also be massive and, to some extent, is avoidable. Through all this, the finance minister still does not find it possible to make some basic announcements that are urgent, such as income support for the unemployed/informal economy, cash flow support, especially for small and medium businesses, and so on. The government is reportedly close to announcing a substantial package, but the specifics haven’t been decided yet. It is hard to understand why an announcement is being delayed, creating huge uncertainty and anxiety, especially among the underprivileged sections of the population. Most of India’s labour force works in the unorganised sector and will suffer loss of income, at least in the coming weeks. While the government has said that wages should not be cut, it will be difficult to enforce. Small businesses themselves are at risk and may not be in a position to pay wages. In fact, it will be important to save small businesses, and interventions will need to go beyond regulatory forbearance. Workers depending on daily wages will be the worst hit as they have practically no savings to fall back on.

Evidence suggests many states are doing much more than the Centre. Kerala, for example, has announced a Rs 20,000-crore package to deal with the crisis, while Uttar Pradesh has initiated steps to transfer money to daily wage labourers. The Union government must work with the states to provide relief to the poor. For instance, there are about 1.8 million homeless people in the country who will need support from state governments in the coming days. Additionally, if the fresh produce in the farm sector is not sold, it will affect rural income and aggravate the economic problem.

via Enough of chest-thumping | Business Standard Editorials

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