Let’s Get Real

Business Standard     25th September 2020     Save    

Context: We have an unprecedented health crisis, with 30 million infections and one million deaths. India is now at the Centre of this world crisis — with close to six million cases and the fastest growth rate.

The State of Economy due to pandemic

  • Global:  World gross domestic product (GDP) is expected to fall between 5 and 10% this year.
  • India: 
  • India’s GDP dropped by 24 per cent in the first quarter
  • Expected GDP fall for 2020-21 is 10-15%

Reasons for the bad state of the economy in India

  • Stringent lockdown
  • In late March, with just 600 cases of COVID infection in the country, we initiated the world’s most stringent lockdown
  • Lockdowns were too draconian for a country like ours with such a large informal sector and no social safety net
  • Virus disruption
  • The spectre of the virus haunts recovery, particularly depressing travel, tourism and retail — all major employment sectors.
  • Immediate challenge in the healthcare sector.

Suggestions to handle this crisis

  • Acknowledge the problem and take it seriously
  • Compare our performance with the global performance using data both in absolute terms and per million population
  • Learn from others: 
  • Learn from the best experiences in controlling the virus — Germany, Taiwan, Vietnam, Thailand, South Korea, Sri Lanka, Kerala, Dharavi.
  • Democracy is not a problem in controlling the virus: Eg-The performance of many democrats like Taiwan, South Korea, Sri Lanka, Kerala
  • Possible to control the virus in High population density areas: South Korea and Taiwan have twice the population density of India and had done exceptionally well.
  • If India had controlled mortality as well as Kerala, we would have 21,000 deaths instead of 90,000
  • Rely on science and expertise: 
  • Rely on our many good scientists and doctors to set policy direction and not in administration.
  • Let science and expertise coordinate what we do, not bureaucrats.
  • Ensure Coordination
  • Work collaboratively between the Centre, state, and city.
  • For lowering mortality rate, It requires a coordinated effort between the city health authorities, doctors and hospitals.
  • Communicate with the people:
  • We must communicate that we are opening up to restore economic activity and warn people that the virus is spreading faster, but we are hardly communicating anything.
  • Citizens should take the lead:
  • For, E.g., People should refuse to enter any enclosed space if even one person is not wearing a mask

Conclusion

Let’s get real: We cannot have life-as-usual, business-as-usual, or a vibrant economy till COVID  is in control.