Opinion | Three big questions after a week’s lockdown
5 min read . Updated: 31 Mar 2020, 11:28 PM IST
PremiumThe shutdown seems more reactive than proactive and requires us to rethink several assumptions
The 21-day lockdown announced by Prime Minister Narendra Modi enters its second week on Tuesday. The entire healthcare sector has been stretched beyond state-capacity from an emergency-lockdown imposed across states. Testing kits and private protective gear for the medical staff still remain acutely short in supply while images of stranded daily-wage, migrant workers walking on highways in the hope of returning to their homes, evoked an emotive imagery.
If one takes a step back to reason (and understand) both the cause and effect of India’s measure of announcing a 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 a reasonable cause behind the announcement of a blanket 21-day nationwide lockdown by the Prime Minister.
Even at this stage, we do not have enough public-health data, nor justification provided that could have alarmed a central government to an extent that it take such a draconian measure, and do so without consulting all state chief ministers or planning 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 to pursue mass-scale, random testing.
Was such a wide-scale and prolonged lockdown even needed in the Indian context? As observed in the recent numbers released by the health ministry on Covid-19 affected cases, the fatality rate of the virus in the Indian strain remains pretty low (at 2.6%), whereas, in Italy the strain of the virus has a fatality rate of 10%. Johns Hopkins University, whose data on Covid-19 cases around the globe has been more relied upon due to its frequency and widespread coverage (as against the WHO), has now even disassociated itself from any prediction that claimed how much of India’s population was likely to be infected from the virus spread in weeks to come.
Even if there were any considerable evidence or an underlying model predicting a widespread contagion, neither the health ministry, nor the prime minister himself provided any information on record that could have justified a blanket lockdown.
In this scenario, the action of a blanket lockdown now seems more reactive than proactive, and is yet another instance of a coercive, unrelated government action lacking any credible scientific data, or a reason to back it. In fact, quite like demonetization, this centralized government decision was made first, and the planning process with executive orders were put in motion much after. States were clueless and were found reacting to situation after the PM’s announcement.
Even the constitutionality and legality of ensuring such a measure without federal consultation (with other states), or legislative action, calls for a wider debate and response by the government.
Further, as argued recently, coercive government measures like these even in times of a public-health emergency or a pandemic, may only allow authoritarian tendencies to more deeply entrench themselves in state attitude to consolidate its control over a society. The prime minister’s use of words like ‘curfew’ unleashed brutish police action restricting mobility of people for getting essential goods and services, and at the same time, made even lives of many healthcare workers in a health emergency difficult (as seen in areas of Lucknow, Hyderabad, Punjab, Kashmir).
Secondly, what are the specific economic relief and rehabilitation to be provided for the most vulnerable workers -including migrant daily-wagers who have now been rendered homeless and jobless ex-post a three-week lockdown announcement?
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, Jan Dhan accounts for cash transfers, BPL card for rations). A Rs. 500 monthly transfer to women for three months (beneficiaries under Jan Dhan) is an embarrassingly small sum.
The marginal rise in wage announced for MGNREGA work remains conditional on the actual MGNREGA work taking place, which is suspended due to a lockdown. Most MGNREGA work in villages in fact involves at least 15 or more workers at a working site, and with Section 144 in place, not more than 4 people can gather in an area (even if they are all observing social distancing).
It is also critical to realize the role of migrant labor in keeping production costs of many labor-intensive businesses low. Our domestic comparative advantage has been in ensuring low-labor cost because of a flexible migrant labor market.
Even farming activity depends extensively on landless agricultural migrant workers. A flexible migrant workforce has been the bulk factor requirement for production in agricultural activity, construction activity, ensuring PDS transfers from one warehouse to a village, small-scale industrial activity across India, and in organizing (informal) local business activities across cities (including street-side businesses).
With hundreds of thousands of workers now reverse-migrating to their respective villages, most of these activities (and businesses) in cities will operate on extremely high labor cost even when the lockdown is lifted. And with low aggregate demand and less cash, most businesses are likely to shut shop and bigger businesses involved in construction work may halt activity for months. Apart from these supply-side concerns, the unemployment rate for most unorganized work (including around 93% of the overall workforce) and organized work is anyway going to skyrocket.
This takes us to the third big unknown: What is the government’s action plan for aiding an economic revival in the months ahead?
The Reserve Bank of India did announce an important set of measures through its monetary policy toolkit, which is targeted at ensuring enough liquidity in the financial market and help banks-borrowers in passing through the next quarter. These were important and necessary.
However, 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 bandwidth for ensuring a progressive revival of all stakeholders in the economy (see here).
Lockdowns are akin to a nuclear strike option on a contagious virus spread. It can at most buy one time to be able to respond to a pandemic/epidemic outbreak. However, given the social and 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 mystifying whether this nuclear option had to be pressed.
Many other innovative, more contextually relevant (partial) models of lockdown (within targeted geographical regions) could have been considered to make these humanely implementable and keep the costs as low as possible. The jury is still out on this, and the echo behind these questions is likely to get louder in the days and weeks to come.
Deepanshu Mohan is associate professor of economics at OP Jindal Global University
