Give Priority to Health, the Engine of Growth

CONTEXT: Even with a narrow sight of recovery, in the absence of a robust public health care system, India is struggling to achieve economic recovery amidst the Covid-19 Pandemic.

Evidence of Green Shoots of Recovery:

• Revival in states with fewer cases: For, E.g. Electricity consumption was higher in states like Karnataka and Andhra Pradesh where the virus was not so rampant then.

Continuing Challenges due to Covid-19 Pandemic :

• Stagnant Growth: As the virus reached in previously free regions, green shoots have plateaued.

• For, E.g. Goods and Services Tax (GST) collections, rose in June but then slipped again in July.
• Consumption and movement of goods have fallen: This is shown by data from states like Maharashtra and Haryana.
• Business Resumption Index for India shows that economic recovery is picking up gradually but remains 33% lower than the pre-pandemic levels – findings by Nomura.

• The extent of Contraction: Varying estimates are being given for the April-June period, with Barclays expecting 25.5%, HDFC Bank putting it at 21%.
• Medium and Long term Concerns:

• Uncertain prospects of a V-shaped Recovery.

• Rising infections have prevented Unions from reopening of factories: Workers are reluctant to return to the workplace due to infections affecting factory reopening.

• Knee-Jerk Reactions: Intermittent Lockdowns have been imposed by many states which have prevented the reopening of the economy, which could lead to a fast recovery from the slow down.

Neglect of Healthcare: A Reason for Continued Challenges: The utter neglect of health care in the past is haunting the recovery.

• Low Expenditure on Health: which was mere 1.8% of the Gross Domestic Product (GDP) in 2017-18.

• Although it has now risen to 3.6% but is still way lower than China with 5%, the United States with 16.9% and Japan with 10.9%.

• Lack of Preparedness: Although big cities like Mumbai and Delhi are able to cope up, smaller towns, as well as rural areas, are in a predicament.

• The health system now also has to face the onslaught of seasonal diseases like malaria, dengue and chikungunya.

The way forward: The growth of the economy is inextricably linked to the improvement of human resource indicators like health and education.

• Increase the penetration of health care facilities up to the village level.
• Better payment and infrastructure to support health care workers.
• Increased focus on access to health care for masses.