Opinion | The covid crisis has put our social capital to a stress test4 min read . Updated: 06 Apr 2020, 10:38 PM IST
India so far has shown the solidarity needed for society to act responsibly and generously
The covid-19 pandemic is like no other crisis in recent memory. Its contagion is too rapid, it has no known cure yet, and its death rate is still rising. In trying to combat the pandemic, economies around the world are paralysed. They suffer from both, supply and demand shocks, compounded by wealth destruction in stock markets. This is also an age of saturation news coverage and social media amplification. So people swing between extremes of despair and denial, trying to find the right balance of optimism and realism. When will the pandemic end? Is there light at the end of the tunnel? Can we start planning for a post-covid economy? The closest comparison of an economic crisis with steep declines in output and employment would be with the Great Depression of the US that began in 1929. After initial policy fumbles, like cutting back government spending and misguided layoffs, it took epochal and transformational policies in the 1930s for the US and the Western world to emerge out of that recession. The US reached its pre-1929 level of gross domestic product (GDP) only after 12 long years. This period saw the emergence of the US welfare state: the “New Deal" and expansion of social security. It changed American capitalism. Drastic measures like the abolition of gold ownership and labour protection laws finally led to a recovery. In the current pandemic, US GDP this quarter may shrink by almost 20%, and world output this year may fall by 3%. Unemployment will rise significantly.
There is no doubt that modern medicine, mathematical biology and genetic science will find a cure that will defeat the pandemic, eventually. Till then, what will the economic cost be? And how will we cope? India has opted to go in for a pre-emptive three-week shutdown of the economy, instead of risking galloping growth in infections and a much higher mortality rate. But the sudden stoppage of daily wages and loss of jobs and incomes among largely informal-sector workers has already pointed to a serious economic emergency. In trying to save lives from the virus, through the lockdown and social isolation, we should not find ourselves in danger of losing lives to starvation.
While “flattening the curve" is of prime importance, the first response to the risk of starvation is to ensure food security, especially to informal-sector workers and their families. A fifth of India’s labour comprises migrants, and a fourth of the workforce in cities are migrants. With their jobs and livelihoods lost, their only option is to hang on in their temporary dwelling places or head back, in reverse migration to the safety of their “home" state, which would defeat the purpose of the shutdown. It is therefore the local “host" government’s responsibility to ensure adequate food and shelter to this class of workers. Luckily, the Union government’s food stocks are in record surplus, at more than 70 million tonnes, even before the arrival of the rabi season crop. Hence, there should be an urgent transfer of foodgrain (say, equivalent to two months’ quota) to these families, with or without ration cards.
For migrant families in cities and the urban poor, however, what may be needed is ready-made cooked food. For this, state governments must co-opt and seek the help and support of non-governmental organizations in preparing and distributing daily cooked meals to needy families. Such partnerships are not unheard of in the context of the midday meal scheme, designed to feed up to 100 million school kids daily. The same arrangement can be used and replicated for the supply of ready-to-eat meals. The cost of free delivery of foodgrain or cooked food to about 50 million people around the country is fiscally affordable. More importantly, this also calls for partnerships between state and voluntary organizations that are based on trust and social capital. The success of our fight against the pandemic and economic rejuvenation will depend considerably on the trust that citizens place in the state and public institutions. That the 21-day lockdown was the right decision was a matter of trust, which measures taken to ensure immediate food security will reinforce.
In the medium term, if there are temporary shortages caused by supply chain disruptions, we have to prevent price gouging and high inflation. To control price levels, some kind of rationing may be needed, not just of foodstuff, but also healthcare facilities and other essential goods and services. The success of rationing depends on the cooperation of citizens with the state. Else, we may have unruly behaviour and black marketing.
Under the current lockdown, adherence to social distancing and movement restrictions also depends on people’s compliance. Likewise, ensuring that covid-positive patients, healthcare workers, airline staff, and others are not stigmatized requires social solidarity.
Chief ministers have been making daily appeals for lockdown discipline. As the economic stress mounts, what will also be tested is India’s social capital adequacy. Will it lead to a Hobbesian breakdown of law and social conventions, or will the spirit of solidarity and feeling of “being in it together" endure? Will this pandemic result in India’s own New Deal, with vastly expanded social security and a more equitable social compact? Whether it was the giving-up of a cooking gas subsidy by the well-off, or the big corporate donations to the country’s covid effort, we have an adequate assurance of India’s stock of social capital. The country will surely pass this stress test too.
Ajit is an economist and a senior fellow at The Takshashila Institution, an independent centre for research and education in public policy