Give Priority to Health, the Engine of Growth

The Tribune     24th August 2020     Save    

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.