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Lockdown: 3 big questions unanswered

Last Updated 31 March 2020, 20:35 IST

The 21-day lockdown announced by Prime Minister Narendra Modi entered its second week on Tuesday. If one takes a step back to reason both the cause and effect of India’s blanket lockdown to counter the spread of coronavirus, three big unknowns still remain a mystery, warranting a government explanation.

The first unknown is in establishing reasonable cause behind the announcement of the nationwide lockdown. We still do not have enough public health data available nor justification provided that could have alarmed the Union government to an extent that it took such a drastic, draconian measure, and did so without consulting all state chief ministers or planning for the likely ramifications in advance. The Indian Council of Medical Research (ICMR) still denies any evidence of community-level transmission of the virus and rejects the idea of pursuing mass-scale, random testing.

If that’s the case, was such a wide-scale and prolonged lockdown even needed?

Recent numbers released by the health ministry on COVID-19 cases show how the fatality rate of the virus in the Indian strain remains pretty low at 2.6%, whereas in Italy the virus has a fatality rate of 10%. Johns Hopkins University, whose data on COVID-19 cases around the globe has been widely relied upon due to its frequency and widespread coverage (as against the WHO’s) has now even disassociated itself from any prediction that claimed how much of India’s population is likely to get infected in the weeks to come.

In fact, quite like with demonetisation, this centralised government decision was made first and the planning process with executive orders was put in motion much after. States were clueless and were found reacting to the situation after the PM’s announcement.

Worse, the Prime Minister’s use of words like ‘curfew’ unleashed brutal police action, restricting the mobility of people to get essential goods and services, and at the same time, made even the lives of many health workers difficult, amidst a health emergency (as seen in areas of Lucknow, Hyderabad, Punjab, Kashmir, Karnataka).

Coercive government measures like these, even during a pandemic, may only allow authoritarian tendencies to more deeply entrench themselves in State-attitude to consolidate its control over society.

The second major question: What are the economic reliefs and rehabilitation to be provided for the most vulnerable workers -- including migrant daily-wagers -- who have now been rendered homeless and jobless, thanks to the lockdown?

Some of the relief steps announced by the finance minister targeting the poor can be availed by only those who have access (or are eligible) to claim benefits as part of existing central government schemes (Ujjwala Yojana for benefits in kind, PM-Kisan, Jan Dhan accounts for cash payments, BPL card for rations).

The Rs 500 monthly transfer to women for three months (beneficiaries under Jan Dhan Yojana) is an embarrassingly small sum. The marginal rise in wage announced for NREGA work remains conditional on actual work taking place, although that is suspended due to the lockdown. Most NREGA work in villages involves at least 15 workers at a worksite, and with Section 144 in place, it cannot happen.

It is also critical to realise how important the role of migrant labor is in keeping the production costs of many labor-intensive businesses low across India. India’s domestic comparative advantage has been in ensuring low labor cost because of a flexible migrant labour market.

Even farming activity depends extensively on landless migrant workers. A flexible migrant workforce has been the bulk factor requirement for production in agriculture, construction activity, for ensuring PDS transfers from warehouses to villages, in small-scale industries across India, and in organizing informal local business activities across cities, including street-side businesses.

With lakhs of workers now reverse-migrating to their villages, even once the lockdown is lifted, most of these activities (and businesses) in cities will operate on extremely high labour costs -- and with low aggregate demand and less cash, most businesses are likely to shut shop; bigger businesses involved with construction work may halt activity for months.

And, this takes one to the third big unknown: What is the Government’s action plan for aiding an economic revival in the months ahead?

The RBI did announce a set of measures through its monetary policy toolkit, which are targeted at ensuring enough liquidity in the financial market and help banks-borrowers in passing through the next quarter. These are important and necessary.

But given how India’s economy was already contracting and suffering from structural concerns of low aggregate demand, low wage growth and high unemployment, monetary policy measures have a limited role in ensuring the progressive revival of all stakeholders in the economy.

Lockdowns are akin to a nuclear strike option on a contagious virus. It can at most buy the country time to be able to respond to a pandemic/epidemic outbreak. However, given the socio-economic costs surfacing thus far, the low-testing, tracing and treatment capacity, and with little evidence provided in public domain to justify a blanket lockdown, it is hard to accept that there was no option but to press this nuclear button.

Many other innovative, more contextually relevant (partial) models of lockdown (within targeted geographical regions) could have been considered to make it humane and keep the costs -- and the harm caused to millions of people -- as low as possible. The jury is still out on this, but these questions are likely to get asked louder in the days and weeks to come.

(The writer is Director, Centre for New Economics Studies, Jindal School of International Affairs)

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(Published 31 March 2020, 20:35 IST)

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