Dystopian pipe dream

FRONTLINE|May 22, 2020

Dystopian pipe dream
The reluctance of the Narendra Modi regime to extend fiscal support to those in real need of help during a prolonged lockdown suggests that it is promoting further concentration of capital. Dire consequences await the economy and the polity.
V. SRIDHAR

NEARLY 50 DAYS INTO THE INDIAN lockdown, the most severe in the world according to widespread consensus, as the COVID-19 count climbs steeply, the economy continues to nosedive. The Narendra Modi regime’s unwillingness to countenance a relief and support package to sustain those who have lost their livelihoods and to prevent erosion of productive capacity has been true to type. What explains the stubborn resolve to go against the global current in which governments across the world, with widely varying ideological predilections, have thrown the kitchen sink at the pandemic while saving their economies?

There is little doubt that India’s response to COVID-19 was lethargic and muddled, especially because the lockdown was not used to bring either the disease under control or evolve a coordinated strategy to manage the economic crisis. The experience with the lockdown indicates that the government simply hoped to ride out of the crisis after the lockdown. Effectively, hope remained the only strategy for a do-nothing government that has punctiliously avoided any kind of intervention to stop the spread of the disease, stabilise the economy or provide relief to millions of Indians on the brink of starvation.

What appeared to be puzzling is slowly falling into place. And what initially appeared to be large-scale bungling, ineptitude and incompetence now seems to have been a rather charitable explanation. Instead, it is now clear that the do-nothing course is a deliberate one, in tune with the Modi government’s right-wing ideological underpinnings. This can be demonstrated by recalling a series of steps taken or not taken since the lockdown commenced on March 25, or, more pertinently, since late January, when the first case was detected, in Kerala. But first the context.

INDO-NOTHING MODE

First, the Modi regime has still not made an assessment of the extent of the damage caused to the economy because of the pandemic and the lockdown. Kerala, a State with far lower means, recently made an assessment of the impact on the economy and on livelihoods based on the linkages between the different sectors of the economy. Thus, most estimates, including by investment banks, rating agencies and other financial institutions, appear to be instances of shooting in the dark. Such an assessment would have been eminently within the domain of a Planning Commission, but the institution was seen as part of an irrelevant “Nehruvian” past and became one of Modi’s first institutional victims after he assumed office in 2014. Only a rump now remains, in the shape of the NITI Aayog, which has proved to be not only inept but utterly non-transparent in its conduct. So, India, despite its long-standing reputation as a country with a mature statistical system, has no official estimate of the damage caused to livelihoods or the wider economy. Critically, this means that even if it wanted to provide relief, the government had no transparent guide to assess the most-affected sectors and their linkages in order to prioritise relief and support.

The second aspect of the official reaction to COVID-19 is the excessive centralisation of authority and the utter lack of coordination between the Centre and the States. Moreover, Modi’s own utterances—such as using the word “curfew” in his first speech—and the overwhelming importance given to the Union Home Ministry, headed by his most trusted lieutenant, Amit Shah—has effectively conveyed the government’s resolve to treat the pandemic-induced lockdown as a law and order issue rather than the unprecedented public health emergency that it is. The muddled handling of the crisis is best illustrated by the fact that the Home Ministry has issued more than three dozen circulars, clarifications and modifications, which has only added to the confusion. The demarcation of zones into red, orange and green districts on the basis of COVID-19 incidence can be only justified by the bizarre logic that this is the most convenient method for the Centre. Obviously, large areas of many Indian cities fall within district boundaries, and since they are classified as “red zone”, they cannot be opened up after the restrictions are relaxed. The obvious course to adopt would have been to let the States and urban bodies decide which areas to open and which to keep shut, on the basis of broad normative guidelines instead of broad brush sweeps that effectively block supply chains and extend the lockdown.

A third aspect of the government’s response relates to the abandonment of the States by the Centre. Since health is a State subject, most States are effectively seeing a surge in expenditure to tackle the crisis. Moreover, most of the States, which were under pressure even before the pandemic, have not been compensated for the “losses” they suffered under the goods and services tax (GST) regime, a promise made by the Centre when it was introduced in 2017. The States’ revenues from GST, which were already under pressure before the pandemic, fell in March. But in April, with the economy virtually shut down, most of the States only garnered 10 per cent of the revenue they earned last April.

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May 22, 2020