Lives vs. Livelihoods vs. Economy

    04-May-2020   
Total Views |
The panic woven around the “Lives” matter over “Livelihoods” needs rethink. People talk about economics as if it were a secondary thing. In retrospect, it is more critical than lives or livelihoods.
 
Economy vs Livlihoods_1&n
 
On predictable lines politics over “Lives vs. Livelihoods” over the issue of “lockdown restrictions” has erupted on the visual media channels. The current countrywide lockdown, set to end on May 17, 2020; but with guidelines specified for various zones.
 
For a balanced perspective, the COVID-19 -Timeline Key Milestones include: 31 December 2019 – First WHO Report; 4 January 2020 – WHO report on social media about a cluster of pneumonia cases in Wuhan; 12 January – China shared genetic sequence of COVID-19; 30 January 2020 – DG, WHO declared the novel coronavirus outbreak (2019-nCoV) a Public Health Emergency of International Concern (PHEIC); 11 March 2020 - WHO made the assessment that COVID-19 can be characterized as a pandemic. Donald Trump visited India on 24 & 25 February 2020.
 
The first case of COVID-19 was reported in Kerala on 30 January 2020.
 
Modi’s first address – Janata Curfew on 22 March - was on 19 March 2020. First three-week national lockdown was declared from midnight 23/24 March 2020. On 14 April, it was further extended up to 3 May 2020. Now, it stands extended up to 17 May 2020.
 
The present national lockdown was imposed under DM Act as per Order dated 24-03-2020 of NDMA ‘to take measures for ensuring social distancing so as to prevent the spread of COVID 19’ (S 6(2)(i)). Additional guidelines were issued subsequently by the Ministry of Home Affairs.
 
In the seventh week of lockdown due to COVID-19, based on a scientific method, districts have been categorized under “Red, Orange and Green” labels. It was also highlighted by the spokesperson that the Model is dynamic one and will be modified based on specific criteria. And, the “Guidelines” to be followed have been specified.
COVID-19 has, to date, affected nearly 40,000 people and over 1,300 dead as on 3 May 2020 after 41 days since the lockdown. Some believe that the data does not represent the real picture. It is more widespread than reported attributable to lack of testing and asymptomatic cases. Many people may be infected; but they may not know it. Medical experts highlight that antibodies testing must be done to determine the real numbers. Also, the death rates reported do not represent the reality.
 
Even then, based on statistical analysis of data, it is difficult to decide on when to lift the restrictions and in what stages.
 
Let me highlight that State governments also have enough legal power in dealing with these biological disasters. Taking cue from the ‘Containment Plan for Large Outbreaks (COVID 19)’ issued by the Union Ministry of Health & Family Welfare which is the Nodal Ministry for biological disaster, several states have issued COVID specific Regulations.
 
It may be noted that “Public Health” is under the State List. States are on the front lines of the pandemic. State Governments have the powers to enact “lockdown” restrictions or relaxations considered essential. Thus, the imperative is for collaboration and cooperation between the Central and State governments.
The Chief Ministers must exercise their powers as per situational requirements keeping the “Guidelines” issued by the Central Government as the basis to incrementally lift restrictions in various fields. Surely, the States can modify or reject them depending on the prevailing conditions.
 
Success of effective implementation of the national and state decisions is dependent on its ground level implementation; district administration and local self-government institutions remain the best bet. As per mandate of DM Act (Ss 30 and 41), a concerted effort is required to ensure that these bodies are administratively, politically and financially empowered.
 
So, all the political cacophony in the media is unwarranted. Instead of blaming the Central Government for either lives or livelihoods, the State Governments are equally to be blamed, if not more.
 
To deal with extraordinary complex situations, the corporate model needs to be followed and implemented: decentralization and incrementalism. At the cost of reiteration, let me highlight that even within the States it is best left to the District authorities to take decisions appropriate to their prevailing situation with the elected MPs/MLAs fully involved with the local administration.
 
Of course, Modi had stated in his first address that “Jaan Hai Toh Jahaan Hai (only if there is life there will be livelihood)”. In his next address, Modi stated ‘Jaan bhi Jahaan bhi (both, lives and livelihood matter equally)." They constitute the conceptual framework which is best left to the Chief Ministers wisdom to act.
 
Apex level authorities in the Central Government recognize that “Lockdown”, if prolonged, is likely to cripple Indian economy. Also, India cannot compare itself with either the U.S. or China to provide financial support to millions of unemployed poor: workers, shoppers and students cannot remain restricted to homes as a precaution against spreading the virus.
 
The Central and State Government’s face a “Hobson’s Choice”. To restart business and production when the curve of the virus spread flattens only, which is not easy to determine, is a “high risk” decision. At the same time, economic recovery without risking more lives, particularly small and medium scale businesses, is an imperative.
The issue that needs to be squarely debated by economic experts now is “revival of economy” more than the second slogan - ‘Jaan bhi Jahaan bhi (both, lives and livelihood matter equally)." Already, Modi is seen interacting with his economic advisers on how best to “revive the economy”. Now, politics and economics must take over the center stage of narratives particularly in the visual media channels.
 
In retrospect, the panic woven around the “Lives” matter over “Livelihoods” needs rethink. People talk about economics as if it were a secondary thing. In retrospect, it is more critical than lives or livelihoods. India is a developing country struggling to emerge as a developed country. The deaths from shutdown and lockdown policies will create (we are already in it) a devastating economic depression, which we can ill afford. If we shut down the Indian economy, it may almost certainly save lives from COVID. But, it cannot eliminate the persistence of disease spread.
 
Be that as it may, all those championing that “Lives” matter must revisit the data of the number of deaths on various counts and relate them to the deaths on account of Covid-19. The basic data of annual deaths in India needs highlighting to gain a balanced perspective. There are around 9.7 million people die every year in India which comes to 26,800 per day approximately as per latest data of population (death rate 7.3 per 1000).
The article that appeared in The Print on 15 April 2020 is yet another panic button spread: "Of these (nearly 200), 53 deaths were caused by exhaustion, hunger, denial of medical care, or suicides due to lack of food or livelihood. At least seven people were killed in violent crimes, such as people turning into vigilantes and attacking others for violating the lockdown. Migrant laborers wanting to return home were forced to walk hundreds of kilometres on highways that speeding vehicles were expecting to be empty. At least 35 migrants were accidentally run over. At least 40 people have died or committed suicide after India shut all alcohol stores. Another 39 people have committed suicide because they feared getting the Coronavirus infection, thanks to the panic created by the lockdown, or because of loneliness or being quarantined. Yet another 21 deaths were caused for miscellaneous reasons."
 
Covid-19 has brought to limelight the real plight of migrant labor without adequate protections left free to fend for themselves after 73 years of democracy and socialism. In retrospect, the Central and State governments must enact labor laws that must provide to them adequate ‘safety net’

Economy vs Livlihoods_1&n 
 
Let me highlight that the situation of starvation deaths differs from State to State. Many hungry people live in countries with food surpluses, not food shortages. India has enough food grain stock to supply to its citizens for more than 1 year. Current stock of rice equals 30.97 million metric tons, wheat stands at 27.52 million metric tons and un-milled paddy stands at 28.70 million metric tons. The issue is, therefore, to ensure people who need food to have steady access to it.
 
The existing safety net for workers provided by the Central Government is uniformly applicable. Of all of them, MGNREGS is a critical welfare program besides other flagship programs of BJP. Quite a few populist schemes are in vogue covering health care, pension plans and unemployment insurance reform and so on. The burden of providing financial succor to jobless migrant labor is an imperative that will further erode the financial state of both central and state governments. Poor will certainly take to streets demanding the State to meet their day-to-day livelihood needs.
 
However, the issue needs to be reviewed from two angles: urban vs. rural poor. For instance, in rural India, according to the latest Periodic Labor Force Survey, one in two people are self-employed; a term that risks masking their otherwise vulnerable economic status. Each State government has its own set of populist measures to address workers/BPL family’s welfare. For example, in Telangana a whopping 87.57 lakh eligible families, approximately 2,86,00,000 (2.68 crores out of total population of 3.9 crores) beneficiaries, are being supplied rice at 6 kgs per person at Re. 1 per kg without any ceiling on the number of members in the family. To arrive at the eligibility of the BPL families, the family income limit in rural areas has been increased to Rs. 1.50 lakh and in urban areas to Rs. 2 lakh. The land ceiling has also been increased to 3.5 acres of wetland and 7.5 acres of dry land.
On enquiry from rural areas in Northern Telangana, there have been no deaths on account of starvation reported recently. And, they are unlikely to occur since the majority of BPL families are covered under one populist scheme or another. In the urban area Cyberabad, two homeless men died of alleged starvation and alcohol withdrawal symptoms during the Covid-19 lockdown.
 
No dearth of eminent economic experts in India like Amartya Sen, Abhijit Banerjee, Manmohan Singh, Montek Singh Ahluwalia, Jagdish Bhagwati, P. Chidambaram, Arvind Panagariya, Arvind Subramanian, Amit Mitra, Gita Gopinath, Bibek Debroi, former RBI Governors C. Rangarajan, Raghuram Rajan and Urjit Patel, Subramanian Swamy, Surjit Bhalla, Rajiv Kumar, and so on.
 
Yet all of them presided over the present economic mess or crises in India with some presiding over the “license Raj” and others presiding over the “Corruption Regimes” in the past. Now the COVID-19 has given an opportunity to air their views and spin their narratives around the issue of “Lives or Livelihoods” depending on their political affiliations.
 
Indian economy has almost certainly entered a contraction, if not already. With the exodus of migrant labor, it is not easy to revive economic activities. Ipso facto, small and medium scale business enterprises, and real estate, are the worst hit or on virtual breakdown due to migrant labor exodus. The real challenge lies exactly in getting the migrant labor back to their workplaces.
 
The scenes of migrant labor forced by speculative rumors and lockdowns to walk hundreds of miles home from India’s major cities and towns was most depressing. Migrant labor is mostly linked to Small and medium scale businesses, and real estate. The State administrations and also their “Employers” are squarely responsible and accountable for their failure to prevent their exodus. Having been uncared for in times of crisis, they are unlikely to return to their jobs in faraway lands.
 
Small and medium business establishments particularly family based establishments like “Tea Stalls and Tiffin Centers” are the worst hit. They have gone virtually bankrupt to restart their activities, rehire workers and reactivate supply chains in order for the economy to rebound even after relaxation of lockdown “guidelines”.
The real critical issues to address include: 1) Early return of migrant labor to work places; 2) Central government’s financial policies and effective implementation; and, 3) Labor Law reforms concerning Migrant Labor.
As per media data, overwhelming 120 million people or more are estimated to migrate from rural areas to urban labor markets, industries and farms, which perform low paying but vital work that are critical drivers of the economy. The biggest challenge is to get them back to work places. Both the Central and State governments must immediately provide suitable incentives and arrange their free transportation to work places by “Special Railway Trains and special convoys of buses of State Road Transport Corporations to carry migrant workers from "the door of their house to the gate of the factory.” If so, restrictions like keeping migrant workers in “Quarantine” needs to be pragmatically reviewed at both ends.
 
Speed is the essential parameter. The government machinery is well aware of the prudent policies to be incrementally adopted. The primary goal for fiscal policy should be to cushion the downward shock as much as possible and set the conditions for the economy to bounce back. So, the initial Central Government and Reserve Bank of India’s monetary policies responses were primarily aimed at cushioning the blow to households and firms.
Direct Beneficiary transfers are good ways to provide needy succor to the real beneficiaries. The Finance Minister, Ms. Nirmala Sitharaman, had announced the stimulus package, which is only the first installment – mostly a welfare measure. Also, the Government has provided relief to delay payments (tax filings, student debt payments, and small business loan payments) as much as possible to help households and firms through the most challenging months in the downturn. The initial set of RBI announcements makes it easier and less expensive to borrow, encouraging firms and consumers to accelerate investment and encourage purchasing decisions. In addition, the government also needs to accelerate payments to suppliers and vendors to improve their cash flow during this difficult time.
 
To revive the economy, both the Central and State governments must formulate a slew of policies and campaigns meant to push people back to work, encourage business confidence and protect as many companies from failing as possible. By conservative estimates, the requirement is additional spending of at least INR5 lakh crores to avoid full blown recession. Direct transfer to BPL families is laudable until social distancing and other restrictions are lifted. And, the World Bank announced US $. One billion loans. As per IMF Chief Economist, Gita Gopinath, s India is spending around 1% of its GDP to combat the economic impact of Covid-19, but emerging markets on average are spending 2.5%. So, India can spend more. Surely, Modi and his team of economic advisors are well aware of the need to spend more incrementally by targeted financial infusion; but not by squandering the scarce resources.
Finally, Covid-19 has brought to limelight the real plight of migrant labor without adequate protections left free to fend for themselves after 73 years of democracy and socialism. In retrospect, the Central and State governments must enact labor laws that must provide to them adequate ‘safety net’ like direct payment of wages into their Bank Accounts based on minimum wages for various skills, provident fund, medical facilities and health insurance, housing provisions, ration cards and so on covering all aspects of their livelihoods. Surely, they cannot be left to fend for themselves in a nation that prides itself as a “Welfare State”.
 
In sum, the real challenge is revival of the economy. There are no magic wands available to restore it to pre-Covid-19 status. No need to endlessly decry and berate the government machinery for its failure to redress the situation. After all, the nation collectively is waging War against the Covid-19 pandemic. To recover from the disruption and destruction to “lives, livelihoods and economy”, the collective will of the nation is vital; but not demoralizing vituperative diatribe poured endlessly against the current state of affairs.