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Photo: Reuters
Photo: Reuters

Opinion | We should use the 80:20 rule to tackle covid and aid a revival

Let’s focus on a few actions that will prove highly effective in extricating us from the current crisis

The 80:20 rule tells us that 80% of outcomes result from 20% of causes. The ratio is not to be taken literally, but as an indication that a small minority of causes account for the vast majority of results, whether good or bad. When dealing with possible remedies for the covid-19 pandemic, India should apply the 80:20 logic in seeking to mitigate problems.

This is roughly what India has been doing, limiting testing to those who travelled abroad or exhibited symptoms of the infection, and by vetting his or her contacts. But as overall numbers grow, the laborious system of contact-tracing will be impossible to follow.

If covid cases cross 200,000 active cases by May-end and reach half a million or more by June-end, can you imagine the logistical nightmare involved in contact-tracing millions of potentially infected people?

The new 80:20 strategy needs to shift from diligent contact-tracing to merely asking each positive test case to list the number of people s/he may have met, and sending those people messages to get themselves tested. This implies that we have to expand on-demand testing facilities quickly. We can’t send a posse of policemen to bring in those who don’t or won’t test. Trust and effective as well as continuous public communication of the risks involved in not testing, not wearing masks, or not following physical distancing norms outside the home should be the new strategy.

The 80:20 rule should have been applied to figure out the nature of the outbreak long ago. Covid infections are largely urban, with nearly two-thirds of those testing positive so far living in a dozen metros or mini metros. And even in these places, positive cases are concentrated in some congested zones and slums. The arbitrary designation of entire districts as green, orange or red may be causing vast economic damage, as a small number of infections can close down an entire district even if it has only a handful of cases in one small pocket or village.

The remedies must also apply the 80:20 rule, with highly infected zones being put to more testing and isolation. This is where healthcare efforts (hospitals, isolation wards) must be concentrated. One needs to apply the rule prospectively to identify places where infections are most likely to occur when we reopen. Organized and industrial sector companies can be trusted to follow masking, physical distancing and hygiene norms. It is in two other areas, small businesses and public transport, that future infections are most likely to occur. Our testing must focus on urban small business clusters.

Seen in this light, barring the mishandling of the migrant crisis, India has by and large done the right thing, whether it is in the gradual scaling up of testing and healthcare facilities, or in the offer of relief to the poor. Despite the growing chorus for unveiling massive relief packages, it makes sense for the government to go slow so that it can figure out where the money spent will deliver the best bang for the buck.

One example: We know the automobile sector is in trouble, but it would be a mistake to give the cash-rich passenger vehicles segment (cars, two-wheelers) too much help. Maruti Suzuki, Tata Motor, Hyundai, Toyota, Bajaj Auto, Hero Honda, Mahindra & Mahindra and TVS Motor won’t go under for lack of government help. At best, they may require extra credit lines and regulatory support—such as a delayed shift to Bharat VI norms—to sell existing stocks.

On the other hand, it would make sense to give the passenger bus sector tax rebates so that states can invest in expanding public transport dramatically over the coming months. Apart from tax cuts, states and private operators can be given interest-free loans to expand fleets.

The same applies to healthcare and real estate. If huge investments must be made in any one sector, it is health, especially primary healthcare, since we have a 73-year investment deficit. The healthcare sector should be financed to expand even at the cost of shifting resources from other heads, for this high-touch sector has a huge job multiplier potential.

In real estate, help must be concentrated in two areas: affordable housing, and completion of existing projects, if necessary by getting rid of existing builders and reassigning the projects to more solvent ones. States must also be told that removal of slums ought to be a priority, and this can easily be done by giving more vertical building permissions in the same areas now occupied by slums. The Dharavi, Golibar and Govandi slums in Mumbai need to be razed, not romanticized, and rebuilt vertically. States that do not change building laws should be given no central subventions for affordable housing.

As for the remaining sectors, the best way to help them out is through a mix of interest-free loans (for the lockdown period). The government could guarantee a certain proportion of the loans given to micro, small, and medium enterprises (MSMEs).

If the 80:20 rule is applied, India can probably navigate the covid crisis by spending no more than an extra 5-7 trillion this year, which would no more than double India’s fiscal deficit. Anything more may cause high inflation after 2021 and prove self-defeating.

R. Jagannathan is editorial director, ‘Swarajya’ magazine

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