The Political Fix: India’s Coronavirus Economic Task Force needs to quickly pull out the big guns

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The Big Story: Stay at home

India is locking down.

The country has effectively quarantined itself in an attempt to limit the spread of the new coronavirus, barring all international flights from landing beginning March 22.

On Sunday, as many Indians carried out the self-imposed “janata curfew” called by Prime Minister Narendra Modi, central and state officials announced a full lockdown in more than 75 districts.

More than 80 cities are on this list, including Delhi, Mumbai, Bengaluru, Chennai, Kolkata. (More details are here).

Indian Railways, which transports more than 20 million people daily, has ground to a halt. All passenger trains including suburban ones, stand canceled for the week. Inter-state bus transit is no longer operational.

These decisions came in part as a response to a huge rush, particularly among migrant workers to return to their homes from cities – giving them a safety net since daily jobs have dried up, but potentially taking the virus into rural areas and previously unaffected towns.

Many states have shut their borders. Delhi Chief Minister Arvind Kejriwal even announced that no domestic flights would land in the Capital, though the Centre later overruled this.

All this comes without Indian authorities believing that we are in Stage 3 of the virus spread: community transmission, when patients begin turning up without any history of travel to a Covid-19 affected area or a contact history with someone infected.

Of course, Indian authorities only on Friday decided to expand the testing criteria and permitted private labs to take samples as well, so it is more likely that we will this week get a better idea of how widespread the disease is.

As of Sunday, there were 360 confirmed cases and six deaths.

Last week, when numbers were only around a 100, we looked at how even if the infection doesn’t spread massively, the virus will still put a severe strain on Indian state systems.

Since then, several things have happened.

Modi’s address

Prime Minister Narendra Modi addressed the nation, taking a tone that he has embraced more intensely as Home Minister Amit Shah looks after the politicking and rabble rousing. This was Modi the paterfamilias, telling Indians not to be complacent, beseeching the old and the vulnerable to stay indoors, asking the rich not to cut the wages of the poor, and announcing the janata curfew (and a 5 pm applause hour for essential workers).

It was an important speech, conveying the gravity of the situation and using the prime minister’s pulpit to impress upon people the need for social distancing.

But it lacked one thing – an accounting of what the government is doing for its people. Here was Modi in a nearly presidential mode, spending the entire time telling citizens what they should do, rather than, as I wrote this week, what the government was doing for them.

Economic tools

Other heads of state have used these speeches to announce cash transfers, loan guarantees and unlimited fiscal support to industry. Modi announced a committee.

The Economic Task force, headed by Finance Minister Nirmala Sitharaman, will have to work quickly if it wants to effectively counter the supply- and demand-shock caused by the virus and the lockdown.

Rathin Roy, director of National Institute of Public Finance and Policy, said we have to think about it as a wartime economy.

“A wartime economy involves investing in winning a war because if you do not win the war, there is no economy to invest in. And therefore, you have to repurpose the economy to make the materials needed for the job and not the materials that we would during peacetime.” 

What are the tools the government can work with?

The states have shown the way:

• Kerala attempted to front-load two-thirds of its annual spend, announcing a Rs 20,000-crore financial package that would see two months of pensions paid in advance, all welfare arrears cleared, universally subsidised meals, Rs 2,000 crore in loans to a woman-only network and Rs 500 crore into the healthcare system.
• Karnataka announced that it would give out free rations for two months at one go.
• Delhi doubled its pensions for widows, senior citizens and the disabled, and decided to increase the rations it would give by 1.5, and give them out free. Free cooked food will be provided twice a day at night shelters for the homeless.
• Odisha said it would offer a 45-day window, during which three months’ worth of rations could be collected at one go.
• Uttar Pradesh announced a Rs 1,000 payment to 35 lakh labourers through direct benefit transfers, and one month free rations to 1.65 crore construction workers.

The Centre will have to walk a tightrope.

While it will also have to focus on those who are most needy and will be hit hardest by travel and work restrictions, it also needs to ensure that companies do not crumble under the economic weight of these circumstances.

So even as it weighs the option of universal cash transfers or a massive expanse in delivery of money through the National Rural Employment Guarantee scheme, it will also have to open the fiscal spigot for firms that will need loans just to be able to pay salaries and overheads since cashflow will be extremely limited.

In other sectors like hospitality and airlines, there might be the need for even more intervention since work has ground to a full halt. This is on top of pre-existing slowdown conditions in India, where the financial sector is already in deep trouble. Even more worryingly, these announcements will need to come soon, even though there is no way to know the full scale of this crisis or how long it will last.

And all this comes even as the government needs to pump money and manpower behind the potential healthcare crisis.

Scroll Ground Report

While many appreciated Modi’s call to emulate organic movements in Europe and take to balconies at 5 pm on Sunday to clap or bang pots and pans for those doing essential work – watch videos here – not all medical professionals were happy about it. Some took to Twitter to demand more resources and equipment in this time of crisis.

Aarefa Johari, in this investigation, pointed to questions around the procurement of Personal Protective Equipment, the hazmat-like suits that medical professionals need to wear to ensure they stay uninfected by the disease.

The story is one of red-tape – but also a tender that was only circulated among some companies. Read more:

“Indian health workers are putting their lives at risk to fight the coronavirus disease. But opaque government decision-making is delaying the supply of crucial equipment needed to shield them from infection, prompting manufacturers’ associations to allege that “malintentions” have undermined the procurement process, an investigation by Scroll.in has revealed.”

You can find all of our coronavirus coverage – from questions about testing to the impact of the shutdown on Bollywood (and the paparazzi) – here.

Our daily updates are here.

And as you read, a reminder – journalism, which is especially needed in times of crisis, is not cheap. To help ensure our reporters can dig deeper and go further, support Scroll.in by contributing to the reporting fund or, if you’re abroad, subscribing to Scroll+.

Big Picture

A study by the Imperial College in London said that the best-case scenario was for social distancing measures and shutdowns to be in place for two-thirds of the time between now and the full deployment of a vaccine, potentially 18 months in the future. That is, “roughly, two months on, one month off”.

What will such drastic changes in the way we live mean for political and economic systems? I wrote this week about how it will change the way our societies are organised, whether by spurring on more surveillance or by rearranging geopolitics.

How do you think this will play out? Will capitalism come under severe strain? Will close-the-borders populists get a boost? Will we all forget the healthcare worries in four months?

Write to rohan@scroll.in

Madhya Pradesh

It seems a bit crazy now that a week ago the Madhya Pradesh political drama took up as much airtime as the coronavirus. And indeed, between the last newsletter and this one, Chief Minister Kamal Nath of the Congress resigned before a floor test could be conducted in the state assembly. The Bharatiya Janata Party is now set to re-take the state, without fighting an election.

The other MP

Ranjan Gogoi, the former Chief Justice of the Supreme Court of India who was part of the infamous judges’ press conference but then ended up siding with the government in a number of crucial cases and sat in judgment on a case in which he was himself accused of sexual harassment, was nominated to the Rajya Sabha by the Centre. Sruthisagar Yamunan wrote about the appointment and what it means for judicial independence. (Hint: it’s not good).

Recommendation corner

DVL Padma Priya is an independent journalist and the co-founder of the Suno India network, which focuses on under-represented and under-reported stories.

Here are her recommendations for this week

“From our network, here is our special Covid-19 coverage, including podcast episodes about why investing in health infrastructure is vital and what social distancing means for the poor. There are more episodes coming. 
Also this is a great New York magazine article by Jeff Wise on what happens when the coronavirus gets into your body. It is a beautiful piece of science writing but also can leave you super anxious and paranoid (if one isn’t already) and it can convince folks to take this more seriously

For non-Covid stuff, if people need a break:

• The Other Latif series on RadioLab, about a man who shares a name with a Guantanamo Bay detainee, is mindblowing. 
• Caliphate by the New York Times’ Rukmini Callimachi, about the Islamic State, is another binge-worthy podcast.” 

Have recommendations for an article, book, podcast or academic paper that deals with Indian politics or policy? Send it to rohan@scroll.in. Previous recommendations from the Political Fix are collected here.

Linking out

India needs to make sure its coronavirus battle focuses on the informal sector. “Relief can’t be targeted at firms – it has to reach households,” writes Andy Mukherjee on Bloomberg.

What about a mortgage holiday and a tax-efficient bond issue? Raghuvir Srininvasan in Hindu Businessline suggests some ways the Centre can think of addressing the economic fallout.

“I do hope that a more pro-people idea of politics and economics will emerge out of this pandemic.” R Ramakumar speaks to The Wire’s Anuj Srivas on the bigger picture.

For all it has been accused of, MGNREGA will be vital in this rural economic crisis. Sudha Narayanan writes for the India Forum on the legacy and importance of the employment guarantee scheme.

Why did a tape emerge with audio of the Finance Minister yelling at SBI’s chairman? Tamal Bandyopadhyay in the Business Standard reads the tea leaves.

India is building a 360-degree database to track every citizen. Kumar Sambhav Srivastava’s series on Huffington Post reveals how the transformation to a surveillance state is complete.

View from the Right: Swarajya’s R Jagannathan calls for a deal that would offer Bangladeshi citizens a legal route to working in India with the proviso that they return after specified periods to their home country.

Can’t make this up

Reader KN Harikumar wrote in with an offering for this section this week. In the Gujarat High Court, the BJP-led government of the state argued that the BJP-led Government of India’s insistence on use of temperature guns, masks and sanitisers was not in accordance with any guidelines issued by the World Health Organisation. “The government asserted that the Centre’s guidelines to use masks create a false sense of security,” the Times of India reported.

Maybe the IT Cell has gone too far? Modi’s call for a 14-hour shutdown on Sunday with a 5 pm applause moment had the forward-makers working in overdrive to claim that the virus dies after 14 hours (it doesn’t), spreads through sunlight (it doesn’t), that clapping will cause it to lose potency and that, once the janata curfew is over, we can celebrate (don’t!).

Meanwhile, here’s a thread of people not understanding that the point of the janata curfew is to stay away from each other.

Got more crazy misinformation about the virus? Thoughts on life under lockdown? Send all comments, questions and feedback to rohan@scroll.in.

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