Talking to this newspaper, senior banker and new president of the Confederation of Indian Industry (CII) Uday Kotak voiced the opinion of the industry when he said that there has to be sustained support for demand in the economy once the pent up demand runs its course once lockdown is phased out. This has to take the shape of both income support for those who have lost livelihoods and of investment that would both address gaps in India’s development ecosystem and, at the same time, boost demand.
Kotak identified healthcare, education, the environment and correcting the rural-urban imbalance as the priority areas of investment. These are key areas of intervention, undoubtedly. But what these sectors need is not just money, but a gamut of clearly thought-through policies. The government’s plan for healthcare has been to pay insurance premia for target beneficiaries. This takes the healthcare infrastructure for granted, except in rural areas, as if it exists and the only question to be addressed is how to pay for its use to treat people who fall ill. The biggest reform needed to make healthcare and education affordable is to increase the supply of urban land, so as to eliminate land as a crippling item of the capital cost of a hospital, school or college. This, in turn, calls for an integrated set of policies on urban planning, mixed land-use and excellent transport connectivity among urban centres and between towns and their hinterland.
Reverse migration will likely prove short-lived, as wages plummet in rural areas, with the added supply of returnees to the rural workforce, even as wages soar in the towns in the wake of the migrant exodus. However, providing for migrant social security and healthcare would be a key factor in securing a stable workforce in the towns.