{"id":110844,"date":"2020-03-28T19:41:00","date_gmt":"2020-03-28T14:11:00","guid":{"rendered":"https:\/\/thepubliceconomist.com\/?p=110844"},"modified":"2020-04-02T21:02:33","modified_gmt":"2020-04-02T15:32:33","slug":"hurdles-in-the-war-against-covid-19","status":"publish","type":"post","link":"https:\/\/thepubliceconomist.com\/?p=110844","title":{"rendered":"Hurdles in the war against COVID-19"},"content":{"rendered":"\n<p>At the stroke of the\nmidnight hour, when the world is grimly awoken with the stark realities of the COVID-19\npandemic, India\u2019s 130 crore people will have made their tryst with a nationwide\nlockdown that will last for 21-days. How does India\u2019s economic misconduct continue\nto afflict and fragment society? To answer this, one must take into account the\ninexorable politicization of economic realities in our country, so much so that\nthe voter is willing to forgo their lack of job situation in the name of a new\nmodel of nationalism, widely acknowledged as jingoism.&nbsp; The sluggish Indian economy is a palpable\nreality. COVID-19, inadvertently so, is perhaps a blessing in disguise for the\nincumbent political fraternity for their much-needed change in narrative. In a\ndisturbing tale of events, <em>The Print <\/em><a href=\"https:\/\/www.youtube.com\/watch?v=_8U7zlWLVQk\">captured<\/a>\nthe plight of a destitute woman saying (rephrased from Hindi to English) \u2013\n\u201cSocial distancing does not matter to us. We rather die of Corona than die of\nhunger\u201d. A grim reminder is knocking at our doorstep. <\/p>\n\n\n\n<h1 class=\"wp-block-heading\">Poor\ninfrastructure or weak institutions?<\/h1>\n\n\n\n<p>Let us consider the\neconomy as a black-box. For this, we need to measure the inputs or \u201cstimulus\u201d\nto reflect on the output or \u201cresponse\u201d in say, the Gross Domestic Product (or\nGDP). The demographic advantage of a young workforce (or labour \u201cL\u201d) for a\ncountry like India when reaped must contribute a significant percentage to GDP.\nIndia\u2019s savings rate (or \u201cK\u201d), at an average of <a href=\"https:\/\/economictimes.indiatimes.com\/markets\/stocks\/news\/indias-savings-rate-plunges-to-15-year-low\/articleshow\/74200784.cms?from=mdr\">30%<\/a>,\nis considerable too. Technological advancements aid the inputs and improve\ntheir efficiency, and thus add to the overall output. For a developing country\nlike ours, clocking <a href=\"https:\/\/www.thehindu.com\/opinion\/interview\/structural-policies-needed-for-7-plus-growth\/article30152893.ece\">6-7%<\/a>\nGDP growth should be an easily achievable target, with or without cyclical\ndisruptions. This is true for a peacetime economy. However, structural snags\nand the infamous \u201cdemocratic malaise\u201d hinders our economy on various fronts. Now,\nlet us understand the relevance of a few measures taken by the government to\ntackle the economy\u2019s highly dismal growth forecasts for the current fiscal\nyear. <\/p>\n\n\n\n<p>For at least <a href=\"https:\/\/economictimes.indiatimes.com\/news\/economy\/indicators\/national-database-of-workers-in-informal-sector-in-the-works\/articleshow\/73394732.cms?from=mdr\">90%<\/a>\nof the workforce which is employed in the informal sector, there exist no\nminimum wages or social safety nets, and relief measures are unlikely to make\nan impact as the vast majority may not have bank accounts. Even direct cash\ntransfers will provide only as much relief as the supporting infrastructure of\nhealthcare and other essential supplies are made available to the beneficiaries.\nWith the Rs. 1.7 lac crores relief package announced by the Finance Minister\nmeant to provide commensurate relief to farmers, MNREGA, women with Jan Dhan\naccounts, organized sector workers, etc., comes with challenges on the state\ncapacity and people capacity front. Striking a balance between the two capacities\nis unprecedented especially in a wartime economy. For example, the additional free\nof cost distribution of food-grains to almost 80 crore households requires the\nPublic Distribution System (or PDS) to function effectively, but <a href=\"https:\/\/in.news.yahoo.com\/explained-unpacking-garib-kalyan-package-191243873.html\">limited<\/a>\nstate capacity, especially in Bihar and Uttar Pradesh, gives rise to\ncomplications in execution. Even raising the wages under MGNREGA will require\nthe state governments to come up with a measure to compensate the daily wage\nworkers through an unemployment allowance for the number of days they stay at\nhome due to the virus outbreak. Only now has the government begun <a href=\"https:\/\/economictimes.indiatimes.com\/news\/economy\/finance\/centre-releases-rs-4431-crore-to-clear-pending-wages-under-mgnrega-to-pay-all-dues-by-april-10\/articleshow\/74849430.cms\">clearing<\/a>\nits pending dues under the scheme and the new incremental provision of Rs. 20\nmay undergo a similar lag. Providing a cover of Rs. 2000 to farmer families,\nunder the existing Rs. 6000 yearly benefit under the Pradhan Mantri Kisan\nSamman Nidhi scheme through Direct Benefit Transfers (DBT), has no additional\nfinancial implication as the first payment under the scheme is anyway due on\nApril the 1<sup>st<\/sup>. There is no labour to tend to the Rabi harvest as\nmigrant workers have been prohibited to work in the farms and are forced to walk\naway, owing to the restriction placed on public transportation, to their villages.\nEven after the continued assurance of state governments to provide for\nessential services, available vegetables and food prices have skyrocketed as producers\nhave resorted to \u201coff-market sales\u201d. especially in parts of Gujarat, due to the\n<a href=\"https:\/\/www.thehindubusinessline.com\/economy\/agri-business\/covid-19-crisis-gujarat-retreats-from-its-order-to-keep-apmcs-open\/article31175280.ece\">closure<\/a>\nof APMCs. The farm sector woes need to be tackled as it poses a challenge with\nboth the current harvest that stands rotting and the new crop that needs to be\nsown soon after the lockdown. <\/p>\n\n\n\n<p>The government\u2019s pride \u2013\nthe JAM (Jan Dhan-Aadhar-Mobile) trinity \u2013 must be exploited while continuously\nimproving the capacity \u2013 both private and public \u2013 under its health\ninfrastructure to curtail the spread of COVID-19. <a href=\"https:\/\/economictimes.indiatimes.com\/news\/politics-and-nation\/kejriwal-says-over-1500-evacuated-from-nizamuddin-centre-seeks-action-against-organisers\/articleshow\/74914900.cms\">Hotspots<\/a>\nsuch as Delhi\u2019s Nizamuddin will continue to erupt as asymmetrical information\nregarding the virus persists. The poor in this case will be the most prone\nunder such a market failure.<\/p>\n\n\n\n<p>By now, it is well\nestablished that we have become an attractive target for an active pathogen. Imagine\na situation of self-sufficiency, where you don\u2019t have to depend on publicly\ndistributed food, water, and even electricity, thus keeping you safe and\nuninfected in an otherwise comparable specialized economy which depends on\nothers wherewithal to perform effectively.&nbsp;\nIf the crisis persists and the curves \u2013 the number of people contracting\nthe virus and the cost to economies \u2013 do not flatten, we will continue to\nrestrict the steady flow of people, goods, and money, moving towards national\nlevel self-sufficiency. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>At the stroke of the midnight hour, when the world is grimly awoken with the stark realities of the COVID-19 pandemic, India\u2019s 130 crore people will have made their tryst with a nationwide lockdown that will last for 21-days. How does India\u2019s economic misconduct continue to afflict and fragment society?<\/p>\n","protected":false},"author":48,"featured_media":78794,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[17,6,3],"tags":[285],"class_list":["post-110844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current","category-healthcare","category-indian-economy","tag-covid-19"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hurdles in the war against COVID-19 - The Public Economist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/thepubliceconomist.com\/?p=110844\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hurdles in the war against COVID-19 - The Public Economist\" \/>\n<meta property=\"og:description\" content=\"At the stroke of the midnight hour, when the world is grimly awoken with the stark realities of the COVID-19 pandemic, India\u2019s 130 crore people will have made their tryst with a nationwide lockdown that will last for 21-days. 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