Rebuilding the economy
The paramount task before India right now is to assess the economic and social consequences of the coronavirus pandemic, work out a consensus across the political spectrum to address it and then use this arrangement to devise a masterplan to take on the task at hand.
The economic cost has been quantified by the IMF, which projects India’s growth at 1.9 per cent in the current year, while the global economy heads for the worst recession since the Great Depression of the 1930s. The social cost first showed up in the mass migration of workers seeking to go back home as they had neither wages nor food and were often without a roof overhead. Next will be the loss of livelihood across the unorganised sector on a scale that will dwarf what happened after demonetisation. Thereafter will come the woes of the organised sector, which will need to work at a fraction of installed capacity and inevitably hand down layoffs.
In this bleakest of scenarios, the only bright spot right now is the attempt to insulate agriculture from the ravages of the pandemic, with farming kept out of the lockdown and the forecast of a good monsoon creating the hope of a bountiful kharif crop. If farmers can bring this crop to functioning mandis, or sell directly, as current rules allow the bypassing of APMCs, the chances will be that starvation will be kept at bay.
But this will not be enough by a long chalk. The way fresh infections have resurfaced in Japan and Singapore indicates that the country will be in and out of lockdown as infections rise and fall, for at least a year from now. Deliverance will finally come when a vaccine is successfully developed, which seems a year away.
So what is the agenda that India has to adopt over the next months to survive and keep going? First comes not economics, but politics. The fight against the pandemic has rightly been left mostly in the hands of the states. This needs to be formalised by evolving a consensus between the Centre and the states to set aside partisan politics and form a platform, an exalted interstate council if not a national government, to take on the task ahead. Then, the real challenge will be to outline that task.
The foremost thing will be to tell the public that lockdown is a blunt instrument that can be used only to flatten the infection curve. The great challenge will be to educate the people on how economic activity can be carefully resumed, even as social distancing becomes a way of life. Despite social distancing, there will inevitably be a resurgence of infection, after which there will have to be another lockdown of a few weeks. In between lockdowns, organised industry will have to work, maybe in one shift instead of two or three, and it will be natural for offices to have only a third of the tables occupied. This is the process that will have to continue until a vaccine is released.
One company which has formalised and articulated a new system is Tata Consultancy Services (TCS). It was first forced to ask 90 per cent of the staff to work from home, but seeing the results, decided to make work from home the new normal. As reported by Business Insider, through this transition, TCS has been able to discard its 20-year-old business model and replace it with a new one called ‘new secure borderless workplace’, under which employees will have to be in office only 25 per cent of the time and the office will have only 25 per cent of staff at any given time. What is most exciting is that this new way of working will actually increase the company’s work throughput or velocity.
Even as these organised sector workplace changes take place, a new social policy will have to be evolved and put in place to address the massive disruption in the unorganised sector. The first task will be for everyone to get food, ration card or not. One solution already being worked upon is ration cards portable across the country. But even that will not be enough. Anybody who comes before a fair price shop and asks for rations should get it. No middle class person will come and stand in the queue, but an administrative system will have to be devised to ensure that ration shop owners do not spirit way stocks in the name of fictitious claimants.
The other challenge before the interstate council or national government will be to transform the country’s healthcare system. The first task will be to administer coronavirus tests to a vastly larger number of people, so that the contours of the disease are known. Healthcare staff, not the police, will then have to track down all those who have come into contact with those infected and persuade them to go under quarantine. Simultaneously, hospital systems will have to be geared to admit and treat all those who need in-patient care. Thousands and thousands of low-cost ventilators will have to be produced, and most importantly, the healthcare staffing will have to be raised by multiples.
The great thing about South Korea is that it has medical systems in place and the people are highly disciplined. If some of this discipline is imbibed in India, it will have permanently changed by the time the virus goes away. And, in case you didn’t notice, private healthcare and insurance will have a negligible role in this scheme of things.
