Back In The Shortage Economy

Context: Analysis of Covid 2.0 situation which resulted in a shortage of almost everything needed to treat COVID-19 patients: hospital beds, drugs, ventilators and, above all, oxygen.

Parallels from the crisis in the mid-1960s: The severe food shortage of the 1960s was aggravated by two continuous droughts. However, following measures draws parallels with the current crisis -

• Role of foreign support: India turned to the US for assistance yet didn’t support US in Cold War.
• Inspirational underlying leadership: Led by Prime Ministers Lal Bahadur Shastri, Indira Gandhi and their cabinet colleagues, had stirred the scientific and bureaucratic committee to bring Green Revolution.
• Upholding right values: Display of extraordinary accountability by political leadership, combining resolve, humility and intelligence.

Way forward: Lessons from the sixties

• Avoid adopting ostrich-like posture: That is denying facts like shortages of vaccines and other medical inputs.
• Ramping up health infrastructure: Medical case for the lockdown was that it would slow disease spread, thus avoiding overwhelming health system and giving time to strengthen the capacity of the health system.
  • Acknowledging the Importance of spending more on health infrastructure (currently at 5% of state expenditure): The inter-State variation in death rate in India is directly related to the extent of health spending in relation to state domestic product.
• Leverage enhanced capabilities: That was unavailable in the sixties
  • Industrial muscle: Possible to ramp up hospital beds, ventilators, oxygen supply within a reasonable time.
  • Foreign exchange reserves: Can be used for the import of crucial medical inputs, including vaccines.
• Address shortages of food: Food prices shot up from April 202,0 suggesting that there may have been a disruption of supply due to the lockdown
  • Address possible supply chain disruptions as states’ lockdowns and the need for high-level coordination and outreach with the farmers.