VIEWPOINT

In fighting the onslaught of the coronavirus in this large country policy measures have to be different in different areas, depending on the patterns of infection spread and livelihoods disrupted. Yet much of the policy so far has been overcentralised, with the initial lockdown decision taken by the central leadership without consulting state-level leaders and with an unnecessary suddenness that left little time for preparation and caused enormous hardships for millions of poor workers. 

Moreover, the lockdown has been enforced not through building community-level trust, but with characteristically harsh police crackdowns, callousness for the stranded migrant workers, and rigidity of top-down rules (Kerala government, which has done an exemplary job of containing the disease, was chastised for attempted non-conformity with by-then outdated central lockdown rules). Some flexibility has now been promised for state governments after May 3. But this is not enough for the regional policy diversity needed.

If one looks at the countrywide dispersion of the infection “hotspots”, there is a broad pattern. They are mostly in urban centres and in economically better-off regions (maybe because of their larger global connections and surely because of urban density). Clearly, stringent lockdown in these areas plus testing and tracing have to be continued for some time. This is also because density and slum conditions make social distancing harder to implement. 

But in large parts of north-central and eastern India, infection has been much less so far. These are areas where India’s poor are concentrated to a large extent. These are also by and large areas where demographic trends and fertility rates have made the population much younger (the fraction of the virus-vulnerable older age-groups is smaller). This means, the economic “hotspots”— where the precariousness of the hand-to-mouth existence of the poor is likely to be more severe, with large proportions of the youth unemployed or under-employed — may be larger in numbers in these areas. So, here the emphasis has to be primarily on economic relief for the poor and recovery policies for agriculture and small and micro enterprises in the informal sector.

The cash crunch in buying various agricultural inputs (before the coming kharif season) and the credit crunch for the enterprises need to be relieved. For the marketing of the incoming rabi crop, one needs to open up all marketing channels for farm produce (including direct farmer-to-buyer sales), going beyond the existing cartelised mandi system. Inter-state, as well as intra-state, public and private transport of goods should be opened up, without too much problems in maintaining some social-distancing rules in roads and markets.

Cash assistance to a much larger extent than announced by the government so far, and to both men and women, with or without bank accounts, has to be arranged. The Mahatma Gandhi National Rural Employment Guarantee Act programmes need to be fully reactivated, and the frequent problems of delayed wage payment and unmet demand for work need to be resolved. For the millions of people who are still outside the public food distribution system, grains released from the over-full Food Corporation of India warehouses should be distributed, without any requirement for ration or Aadhaar card.

Unless the infection geography changes significantly, the state governments in these north-central and eastern regions may thus be a bit more relaxed on the lockdown and focus on economic issues. Also, in predominantly rural areas, social distancing is less difficult to implement, particularly if panchayats and community organisations are mobilised in spreading messages about appropriate public hygiene practices.

Schools should be kept open — cautiously; one has to keep in mind that the school meal is often the only major meal for the children. In any case, as we have mentioned, the age-group composition is usually such that the disease-vulnerability (except through malnutrition) may be somewhat less (although, one has to keep in mind that the public health system to take care of the diseased is much weaker in these areas). One has to combine less stringent lockdown with a more active policy of local primary health workers paying special attention to the old and the infirm in regular household visits.

In the more infected, more urban, disease “hotspots” the immediate economic relief policies to be taken are quite clear. The particular focus should be on the stranded migrant workers, the suddenly-unemployed street vendors and other self-employed and wage workers (and, if our prisons are to be de-congested in the time of the virus, the released masses of under-trial prisoners). For these people, apart from mobilising a network of community kitchens and making sure that the promised cash assistance (even if workers do not have a bank account) and enhanced rations of food (even if the migrant workers do not have their ration cards) reach them, immediate debt-forgiveness and infusion of new credit need to be arranged for those with small business. In addition, a new programme of urban employment guarantee on public works and other civic projects should be immediately started to provide alternative employment to at least those who do not want to go back to their villages. Moreover, a pro-active policy is called for to discourage all major factory employers from laying off their workers (including their contract workers), and offer in return a significant wage subsidy for all workers on their payroll (as some north European countries are doing), using, if necessary, Aadhaar card identification to avoid fake payrolls.

The central government so far has been quite stingy in announcing an economic relief package. Only about half of the announced first package contained new programmes (amounting to less than 0.5 per cent of gross domestic product). The total package needed, by many accounts, should cost 10 times that much. At a time of looming economic and humanitarian catastrophe, fiscal rectitude cannot be our priority.

Also, since much of the spending on health, agriculture, and social protection has to be incurred by the states, much needs to be done in clearing the goods and services tax arrears, in making the rules of financial allocation in central programmes more flexible, and immediately creating an infrastructure for financial transfer and coordination between the central and state governments. In this respect, I endorse the recommendation made by the Centre for Policy Research of a new emergency set-up under the hitherto-dormant Inter-State Council.


 The writer is professor of Graduate School at University of California. This op-ed first appeared in the Business Standard.

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