Co-authored with Prof Lekha Chakraborty, NIPFP
Friday, July 31, 2020
The Political Economy of Lockdown in India - NIPFP Blog - June 3, 3020
Covid-19 crisis: Lockdown, as a strategy to control the pandemic, has proven to be neither good nor bad
Financial Express June 10, 2020
Co-authored with Prof Lekha Chakraborty, NIPFP
As predictable as it can be, Prime Minister Narendra Modi announced the lockdown at 8:00 PM on March 24, 2020, giving the country and its 1.3 billion people all of four hours to get ready, evoking memories of the demonetisation announcement and the midnight launch of GST. This was done by invoking the National Disaster Management Act, 2005.
While many analysts lauded the communication strategy of the leader ‘directly’ speaking to the people as political decisiveness, our contention in this column is that it was a clear case of using ‘command and control’ strategy instead of cooperative federalism, which the government was taking pains to highlight that it believed in. The manner in which we are getting out of the lockdown, with an ad hoc and arbitrary exit strategy, at a time when the number of Covid-19 cases has seen a mountainous surge (almost every other day previous records are being broken), shows a clear lack of planning, and sadly reeks of cluelessness.
While the intent of the lockdown was ‘to flatten the curve’ and control the spread of the pandemic, almost irreversible economic disruption resulted in many sectors, and a mounting humanitarian crisis through the exodus of migrant labour is staring at us with all its severity. Empirical evidence shows that on March 24 the number of confirmed cases stood at 564, with a recorded death toll of 10. India has broken into the list of top-10 most affected countries in terms of Covid-19 positive cases.
To put things in perspective, official statistics reveal that as of June 9 the outbreak of Covid-19 had been confirmed in 215 countries, and we, along with the US, Brazil, Russia, Spain, the UK, Italy, France and Germany, are among the most severely affected. As of June 9, the virus had infected 266,598 people in India, and the mortality had risen to 7,466.
Lockdown, as a strategy to control the pandemic, has proven to be neither good nor bad. From the Indian perspective, ideally, it would have been effective had this period been used for improving the healthcare infrastructure or at least boosting up the public health budget to deal with the imminent crisis. Constitutionally, even though public health is a state subject, in the Seventh Schedule (it defines allocation of powers and functions between the Centre and states), entries 28 and 81 in the Union List deal with “port quarantine, including hospitals connected therewith,” and “inter-state migration and inter-state quarantine,” respectively. The intergovernmental framework is thus crucial in dealing with the pandemic through policy coordination and fiscal transfers, especially when states are doing the heavy lifting to control the pandemic, despite their constrained fiscal space.
In an ideal world, the fiscal decentralisation at the local level—the principle of subsidiarity—would have been the effective policy mechanism, meaning the decision-making processes in a crisis being carried out at the level of the government closest to the people. But, in India, the Covid-19 policy response has been highly centralised. Although there have been a few online meetings between CMs and the PM, they have not been effective as almost all decisions have been taken unilaterally. Even the decision to go ahead with the lockdown was not discussed in the PM’s videoconference with CMs. Also, in spite of early warning from the WHO in January, India’s response, with the closure of international borders and ports entry, was woefully late, quite obviously to make way for the Namaste Trump event to take place, and cater to some of the government’s ‘more urgent’ political considerations.
Now, we are staring at a dual crisis—a public health crisis and an economic crisis, through irreparable disruptions in supply chains. The pandemic hit the Indian economy when it was on a significant slowdown mode. The announced fiscal and monetary package of Rs 20 lakh crore has been largely for infusing liquidity into the system for an economic revival, in long-term reform-oriented tranches. These tranches appear more or less ‘business as usual’ rather than an ‘emergency pandemic package’. Interestingly, most analysts have identified the actual Covid-19 response package as being only 1% of GDP or thereabouts, and not 10% as announced by the government.
The trade-off between ‘life’ and ‘livelihood’, and the government’s appalling apathy in dealing with the plight of migrant labourers, is rapidly burgeoning into a humanitarian crisis of mammoth proportions, with the increasing number of hunger deaths. The lack of authentic data on Covid-19 positive cases and the mortality is another area of concern. The recent data from cremation and burial grounds in Delhi contradicts the official Covid-19 mortality statistics by being almost four times higher than the official figure. This makes one wonder whether there is gross underreporting of data, both at the central and state levels. The lack of preparedness for aggressive testing, treating and quarantining—asymptomatic and symptomatic tests—during the prolonged lockdown provokes dismay, to say the least; this, in spite of the WHO’s clarion call to ‘test, test, test’.
South Korea has been regarded as a benchmark on this front, and its success in containing the pandemic is largely due to the aggressive testing strategy. Interestingly, the epicentre of the pandemic has shifted from China to G7 countries, and now to Brazil and India.
Needless to say, these are politically challenging times for the government, and the diversion of focus from the pandemic to policies towards tackling external aggression (this time, from China) could prove costly. We are tackling a pandemic, and the projected skill-sets and carefully created image and characteristics of a leader would not help in dealing with it. For that, we need strong ‘institutions’ and ‘policy certainty’. But, for the moment, all that one can infer is—as a country, the policy that came directly from the central government has been far from adequate. While there have been some bright spots, the successes have been exclusively at the level of states. One can only hope that the Centre scales up its policy responses and intensifies its efforts at mitigating, and providing relief to, this human and economic catastrophe, before it gets too late.
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