Episode 26: Connecting the Unconnected at the time of Covid-19
Osama Manzar, Founder and Director of DEF spoke with Amirullah Khan- an eminent economist. He teaches in ISB and Ashoka University. Amir puts forth his views and observations about the impact of coronavirus on healthcare and mentions that it is not as damaged as it was presumed to be. But the economy has certainly experienced staggering downward trend.
‘The impact of COVID-19 on health sector is not as bad as it was thought to be which is not to say that the virus hasn’t had a serious negative impact on India. The country is amidst a major economic crisis. amidst a major economic crisis Covid-19. It started in China, and spread across Spain, Italy, Iran, US and UK. Evidently, developing countries have shown lower infection rate as compared to developed countries. Cases of infection from Latin America, Sub-Saharan Africa and South Asia are known far less.
Speaking specifically of India, states such as Telangana, Kerala, Tamil Nadu and Maharashtra have shown higher infection rate. This could be because of the intensity of testing and tracing in places with more resources.
Indian economy was not in good shape even before the crisis. In the last quarter, India’s growth rate was lowest in 18 years—unemployment was in its peak and the exchange rate was at its worst. The GST returns were low and the government had zero money or fiscal space.
Hence, the belief that Indian economy suffered because of Covid-19 is a myth. Late announcement of the lockdown despite being aware of the situation resulted from lack of preparedness in the government. The African countries imposed lockdown in early March, wherein India waited until March 24th and lost two good weeks which could have otherwise been used to prepare people for the coming predicament. Due to the sudden announcement of the lockdown the schools had to rush the students back home, the hostels had to be vacated, and the migrant labourers were stranded on the streets.
The wrong use of the word ‘Curfew’ by the Prime minister, converted the humanitarian problem into a law and order problem. Instead of assigning health administration to control the situation, police was put in charge.
When people’s concerns and problems should have been addressed, the people were harassed. After the lockdown was declared, around 30000 trucks loaded with food and other perishable items were stuck on highways.
If measures such as contact less app-based doorstep delivery from restaurants and food marts, were marshalled efficiently by the government, it would’ve saved people from several long queues around grocery stores.
The government could have helped people with three essential basic facilities- Money, food and bandwidth. Amidst ongoing crisis, the only source of connectivity is via Internet.
Earlier economy needed human beings, which was driven by migration and it stayed for 40-50 years. In the current scenario, economy has consumed human beings by increasing consumption, consumerism, and usage.
Even though China is now open and all the shops and restaurants are functioning, people avoid travel and are not buying things other than basic essentials. Consumption has dropped by 40-50%. This has led factories to operate at half their potential, resulting in people getting fired.
People now have moved from large scale to subsistence consumption. If the consumption is weak, the produce is less—and if produce is less then unemployment shoots up and people will have less money to spend. Ideally, the government should have curbed crowding and allowed shops and businesses to function.
Last year, the rural income dropped by Rs 40 per person, and if this drop is reflected upon 800 million rural people, we can only imagine the impact Rs. 40 less spending capacity will have on the economy of the nation.
The ruling class always benefits from shutdowns as they enjoy the authority and power at their disposal. However, instead of using the current situation to exhibit power, it should be concerned about paying its officials and helping the poor.
To build a better India, government should come up with a robust plan to help 200 million people who have lost their jobs by providing Rs 5000 per month and help them sustain; provide economic stimulus for the economy; ensure that the lockdown is not treated as a shutdown; test 3000 people instead of 300 people per million; build more hospitals with ICU facilities; employ more doctors per 1000 people; and work towards economic welfare.
Just as 9/11 incident led the government to strengthen security of the nation—Covid-19 should result in more quality investment by the government in the healthcare sector to make way for a healthy and secured nation.
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