Building a more resilient India
Along with lives, the government focused on livelihoods. Modi's government began to provide massive immediate economic relief to vulnerable groups. The...
Along with lives, the government focused on livelihoods. Modi's government began to provide massive immediate economic relief to vulnerable groups. The first relief package, integrating together fiscal, compliance, and monetary measures, came just a few days after the lockdown was announced. The urban poor were provided food security through PDS shops and received cash payments through Jan Dhan accounts and pension schemes. The rural poor were provided food, cash payments, and allowed to continue their agricultural activities. The middle class and MSMEs were provided compliance relief and a loan moratorium. The RBI slashed rates and flooded the financial system with liquidity to stabilize credit markets and enable ample credit for corporates
Jaan bhi aur jahaan bhi – lives and livelihoods. These are the twin priorities that are driving Prime Minister Narendra Modi's Covid-19 pandemic management strategy. Every country has tried to balance these same twin priorities during the six months of the pandemic. Some countries have muddled along, while others have frankly struggled. Nonetheless, there is widespread consensus that only a few countries are managing this crisis well. India is among them.
India is a vast low middle-income country with very high population density. How is India succeeding, while richer countries with far superior health care facilities are failing? The Modi government has managed the pandemic well by focusing on four major aspects: (1) following a well-sequenced, staged approach; (2) establishing a rigorous lockdown and then lifting it gradually; (3) providing massive immediate relief to all vulnerable groups; and (4) utilising this global crisis to build a forward-looking Aatmanirbhar Bharat.
A well-sequenced, staged approach is necessary when uncertainty is high. PM Modi's government has consistently followed this strategy during the Covid-19 pandemic. Some other countries have committed themselves too early to one or the other strategy. For instance, the UK first followed a herd immunity strategy, then quickly reversed course and implemented a harsh lockdown.
On the other hand, PM Modi's government has been tracking pandemic developments closely and then implementing, as required, necessary measures. India was one of the first countries to ban travellers from China.
As the pandemic began to develop around the world and it emerged that there was no treatment or vaccine available, implemented a nationwide lockdown. This was a preemptive surgical strike since India had only 536 cases then. Now that the lockdown has proven to be effective and treatments are becoming available, the lockdown is being lifted. PM Modi and FM Sitharaman are following a similar calibrated approach for the economy as well.
The second aspect of the Covid-19 pandemic management strategy has been the implementation of a rigorous lockdown followed by a gradual lifting of the lockdown. When the lockdown was implemented on March 25, daily case growth rate was over 16%. At this rate, we would have close to 4 million cases by now and the pandemic would have overwhelmed us; instead, we have just over 118,000. The lockdown has bought us precious time while we wait for treatments and a cure. History will surely acknowledge the millions of lives that have been saved.
Importantly, the lockdown enabled us to prepare ourselves. We educated our 1.36 billion people about social distancing, handwashing, and using face covers. Medical facilities were rapidly expanded. Every district now has isolation wards, PPE kits, trained medical staff, ventilators, and oxygen treatment. We stockpiled medicines, medical supplies, and PPE kits. Our engineers figured out how to make affordable ventilators and our scientists geared up to produce vast quantities of vaccines and drugs.
The lockdown is now being lifted in an impressive display of cooperative federalism. Every State is following the WHO T3 approach (test, treat, track) in tightly defined containment zones. Supply chains are once again beginning to hum with activity. Factories are starting, shops are beginning to open, offices are filling up again, and delivery services are back in business. Trains, planes, trucks, and buses have been restarted with appropriate safeguards.
Along with lives, the government focused on livelihoods. Modi's government began to provide massive immediate economic relief to vulnerable groups. The first relief package, integrating together fiscal, compliance, and monetary measures, came just a few days after the lockdown was announced. The urban poor were provided food security through PDS shops and received cash payments through Jan Dhan accounts and pension schemes. The rural poor were provided food, cash payments, and allowed to continue their agricultural activities. The middle class and MSMEs were provided compliance relief and a loan moratorium. The RBI slashed rates and flooded the financial system with liquidity to stabilize credit markets and enable ample credit for corporates.
With the Rabi crop in the fields, agriculture was provided substantial support. The harvest was collected, remunerative prices paid out to farmers, and NREGA activities resumed. On average, India's 9 crore farmer households received about Rs 12,000 directly into their bank accounts in the past 60 days. State governments pumped in even more money through their various DBT programs. Food distribution through PDS shops has been abundant and universal. The NREGA average rate was increased to Rs 202 and its funding enhanced by 65% to over Rs. 1 lakh crores.
The MSME sector received Rs 3 lakh crores through an immediate no-collateral credit line. Unfortunately, many MSMEs still chose to release their daily workers and these workers began returning to their rural homes. With a more robust safety net in their villages, migrant workers do feel more secure at home. The journey back has been long and full of suffering; sadly, many have died in accidents as well. Fortunately, State governments worked together to get migrants onto trains and buses. Civil society came out in full force to provide them relief. The vast reverse migration is now winding down.
On May 12, PM Modi announced his Aatmanirbhar Bharat vision to build a more resilient India. While other countries are still struggling to contain the pandemic, PM Modi's government has converted this crisis into a powerful reforms-driven boost for India. FM Sitharaman laid out the details in five tranches from May 13 to 17. Agriculture is being completely deregulated – farmers will now be able to sell their production freely. The coal, mining, and defense production industries are being thrown open. A nationwide safety net is being created through the 'One Nation One Ration Card' scheme. Privatisation of public sector enterprises will be pursued aggressively in all non-strategic sectors. Insolvency proceedings are being relaxed by one year. States are getting more funds to strengthen their discoms and implementing safety nets. Healthcare spending is being increased enormously. These are just some of the many reforms announced.
The Covid-19 pandemic will be with us for at least the next two years. The post-Covid world order will be starkly different as nations are laid low by this terrible disease. PM Modi has seized this hinge of history to build a more resilient India. An India that is able to protect both lives and livelihoods. A stronger, more self-reliant India that can look to the future with optimism and hope.
(The writer is the Chairman of the Standing Committee on Finance in Parliament and a Lok Sabha MP from Hazaribagh, Jharkhand. Views expressed are personal)