24th March – Editorials/Opinions Analyses

Contents:

1. The age of the neoliberal virus
2. A pandemic, an economic blow and the big fix
3. Lockdown and beyond: Governments must aid people
4. For a new generation of heroes in court
5. COVID-19: Many tasks at hand
6. Long live the nation-state: The COVID-19 pandemic has demonstrated

THE AGE OF THE NEOLIBERAL VIRUS

Focus: GS-III Disaster Management

Introduction

The coronavirus that causes the COVID-19 disease is the first neoliberal virus in the world. To say so is not to reduce its dangers but to criticize how it has been confronted by most governments across the world.

Criticism: Hits and misses

• On March 12, Denmark largely shut down for at least two weeks, as did many other European nations, with the exception of the United Kingdom and some others. This shutdown was necessary, and could have been implemented a little earlier, however, other necessary things were not implemented.
• One of the most crucial is testing. Denmark, like many other European nations, is testing only acute cases.
• If you have mild symptoms — and at least a hundred other diseases give you the same symptoms — you are simply expected to self-isolate (in doubt).
• It is also surprising that while it takes two to four days for test results to become available in rich western nations, it takes only four hours in the afflicted regions of China.

Criticism: Shift in Burden

• A major burden of stopping the virus has been passed on to ordinary citizens, who now have to isolate themselves even if they just have the common cold, while the government issues directives but spends as little as possible.
• This is not surprising.
• For the past two decades, whenever corporations or significant banks have stumbled, national governments have pumped public money into them, while cutting public services (including health and research) to raise the money.
• Such buffering of the national economy is necessary.
• But there are two major problems.
• Most of this money is not being strictly earmarked to preserve jobs, and the lowest wage earners are particularly ignored.
• The other problem is that almost no country has put in comparable amounts into the health, social and educational aspects of combating the pandemic.

Advantage China

• There are rumours that the virus scare in China, added to the subterranean racism of the West when anything bad is reported in non-white nations, sent American and European investors on a panicked selling spree.
• They got rid of their controlling shares in significant Chinese sectors at a pittance, and these were bought up by the Chinese government or Chinese investors.
• Now, with China seemingly in control of the virus, it might be that it has also regained more control over its own economy and sectors.

A PANDEMIC, AN ECONOMIC BLOW AND THE BIG FIX

Focus: GS-III Disaster Management, Indian Economy

Why in news?

• India has just finished a day of curfew on 22nd March 2020, and clapping to practice ‘social distancing’ and to express gratitude to the millions of health and essential services workers amid the COVID-19 pandemic.
• It was a laudable initiative by the Prime Minister to rally the nation together.
• The nation is truly at war, as he alluded to, and it can be won only by everyone coming together in this ‘tragedy of the commons’.

India lags

Days before the curfew of 22nd March-

• United Kingdom unveiled the U.K.’s biggest economic recovery package in its history, as an antidote to the crisis; there is no fixed cost to it.
• The United States is finalizing a trillion-dollar economic recovery package.
• Germany is going ahead with ‘unlimited government financing’ for the disruptions due to the outbreak.
• France, Spain, Italy and the Netherlands have all launched a half-a-trillion dollars combined in recovery measures.
• While the rest of the world has sprung into action, India has merely announced the setting up of a task force under the Finance Minister to explore economic recovery options.
• Contrary to rhetoric, neither will India be immune to this imminent economic crisis nor will some ‘preternatural force’ insulate us from this epidemic.
• It is prudent to swing into action right away to soften the inevitable economic blow.

The Scare

• There are already reports that a third of all restaurants could shut down in the formal sector alone and shed more than 20 lakh jobs, in the coming months.
• The entire automotive sector is shutting down its factories, putting at risk the incomes of a million people employed in this sector.
• When people lose their jobs, entire families suffer, consumption drops and overall demand collapses.
• When businesses close down, then they default on their commercial obligations down the chain and to their financiers.
• This freezes up credit flow in the economy and halts production.
• Since this is a global crisis, it is not even possible for India to import and export its way to recovery.
• Under such painful conditions, India needs a comprehensive recovery package that will first cushion the shock and then help the economy recover.

Way-Forward: Three Step Plan

So here is a broad plan for a ‘COVID-19 Economic Recovery Package for India’-   the package that should rest on four pillars:

1. Providing a safety net for the affected
2. Addressing disruptions in the real economy
3. Unclogging the impending liquidity squeeze in the financial system
4. Incentivizing the external sector of trade and commerce.

Detailed Explanation of the Way Forward to PROVIDE SAFETY NET:

Hedging Unemployment

• The destruction of jobs, incomes and consumption can be addressed through a direct cash transfer of Rs. 3,000 a month, for six months, to the 12 crore, bottom half of all Indian households.
• This will cost nearly Rs. 2.2-lakh crore and reach 60 crore beneficiaries, covering agricultural labourers, farmers, daily wage earners, informal sector workers and others.
• It is important that this is not just a one-month income boost but, instead, a sustained income stream for at least six months for the millions who have lost their incomes, to provide them a safety net and a sense of confidence.
• The Pradhan Mantri Kisan Samman Nidhi (PM KISAN) programme with a budget of Rs. 75,000 crore can be subsumed into this programme.
• The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) must be expanded and retooled into a public works programme, to build much-needed hospitals, clinics, rural roads and other infrastructure.
• This can be achieved by integrating MGNREGA with the Pradhan Mantri Gram Sadak Yojana and the roads and bridges programme. These three programmes together have a budget of nearly Rs. 1.5 lakh crore.
• This must be doubled to Rs. 3 lakh crore and serve as a true ‘Right to Work’ scheme for every Indian who needs it.

Hedging Hunger

• In addition, the Food Corporation of India is overflowing with excess rice, wheat and unmilled paddy stocks — enough excess stock to provide 10kg rice and wheat to every Indian family, free of cost, through the Public Distribution System.
• This combination, of a basic income of Rs. 3,000 a month, a right to work and food grains, will provide a secure safety net.

Helping with the Treatment Deficiency

• COVID-19 testing, treatment, medical equipment and supplies capacity can be expanded through the private sector and be reimbursed directly for patient care.
• This will need a budget of Rs. 1.5- lakh crore for testing and treating at least 20 crore Indians through the private sector.
• This will help create a large number of jobs in the private health-care sector, with trickle-down benefits.

Steps for the RBI

• The Reserve Bank of India (RBI) announced a Rs. 1.5-lakh crore liquidity and credit backstop facility on 23rd March 2020, which is a very welcome move.
• Further, the RBI should show regulatory forbearance and also set up a credit guarantee fund for distressed borrowers for credit rollover and deferred loan obligation.
• The central bank must also immediately reduce interest rates drastically to spur business activity.
• A two-year tax holiday and an appropriate incentive scheme must be designed for exports and service sectors that have been devastated (airlines, tourism, hospitality, entertainment, logistics, textiles, leather).

Where is the money for all of this?

The ₹5-lakh crore to ₹6-lakh crore recovery package can be funded largely thorough three sources —

1. Reallocation of some of the budgeted capital expenditure
2. Expenditure rationalization, and
3. The oil bonanza

• Given the extraordinary situation the world is facing, it is important to reprioritise our expenditure plan in the near term. The government had budgeted more than Rs. 4-lakh crore in capital expenditure for FY2021. This will, unfortunately, have to be reworked and some part of it allocated to the COVID-19 recovery package. For example, there is a budget of Rs. 40,000 crore for the revival of the telecom public sector units which can be delayed and the amount reallocated.
• The blessing in disguise for India is the dramatic fall in global crude oil prices —from $40 a barrel to an estimated $20 a barrel — which can help save nearly Rs. 2-lakh crore; this can be used to fund the recovery package or make up for shortfall of tax revenues.
• To be sure, there will be a fiscal implication of this stimulus package and the fiscal deficit will rise driven both by increased expenditure and shortfall of revenues from the slowing economy. But now is not the time for fiscal conservatism.

Role of the States of India in Raising money

• The States combined incur an expenditure of ₹40 lakh crore. There can be some sharing of expenditure of the recovery package of ₹1-2 lakh crore by the States.
• But after Goods and Services Tax (GST), States do not have the fiscal freedom to raise tax revenues on their own.
• They are largely dependent on the Centre for their tax revenues through direct taxes and GST.

Conclusion

• In summary, India needs an immediate relief package of ₹5-lakh crore to ₹6-lakh crore targeted across all sections of society and sectors of the economy.
• Though daunting, the money for this can be found through detailed analysis and some bold thinking.
• The global economy is headed for a dark phase and it is our duty to rise to the challenge to secure the future of all Indians.
• It is time to think big, bold and radical to pull our economy out of this crisis.
• This is India’s moment for the equivalent of the “New Deal” that U.S. President Franklin Roosevelt launched in America after the Great Depression of 1929.

LOCKDOWN AND BEYOND: GOVERNMENTS MUST AID PEOPLE

Focus: GS-III Disaster Management

Why in news?

India has responded to the spectre of large-scale transmission of the novel coronavirus and the unprecedented public health catastrophe it may bring by ordering a full national lockdown.

Why and How?

• The goal is to flatten the transmission curve and help a frayed health system cope with a large number of cases.
• Physical distancing of people, ensured through a suspension of rail and inter-State bus services, closure of public places, cessation of all non-essential activity and street-level monitoring, is the first order priority during a pandemic and the lockdown can ensure that.
• The options being used by States to enforce this are Section 144 of the Criminal Procedure Code, the Epidemic Diseases Act, 1897 and the Indian Penal Code.
• What must follow is the galvanizing of governmental machinery to address essential requirements.

How the Janata Curfew Turned out to be, and What we can learn?

• The Janata Curfew on 22nd March 2020 saw near-total compliance, but culminated in noisy public celebrations.
• It was also marked by a last-minute scramble among migrant labour stuffing themselves into trains to return home ahead of the shutdown.
• Many hundreds more remained stranded in several cities, crowding termini, as train services were withdrawn.
• These hapless people, who must largely fend for themselves, have been potentially exposed to the pathogen; some may have unwittingly infected others.
• The week-long lockdown ahead cannot become a similar exercise in chaos, confusion and misery.
• As a war-like moment in the country’s history, it calls for massive preparation with all hands on deck to mitigate the impact on people, and to formulate a public health response for the period beyond the shutdown.

Duty of the Governments

• Governments must aid people during this difficult phase and prepare for wider testing.
• Governments have a duty to ensure that the most vulnerable classes, economically and socially, including the elderly, have access to essential articles including medicines, close to where they live.
• Considering that about 37% of households depend on casual labour as their major source of income for rural and urban India, and nearly 55% have tenuous regular employment, as per Periodic Labour Force Survey data for 2017-18, it is essential for governments to ensure that they get subsistence wages for as long as restrictions last.

• Funds transfers during the containment phase of the pandemic, followed by a stimulus to sustain employment are necessary.
• But a bigger challenge stares India in the face: can it get a universally accessible testing system in place to prevent transmission when the lockdown is lifted?
• China, South Korea and Singapore, as WHO points out, adopted a strict shutdown, but used the breather to get a grip on infections by testing at the population level.
• This is the hard work that lies ahead, and it will test the mettle of India’s national and State governments.

FOR A NEW GENERATION OF HEROES IN COURT

Focus: GS-II Governance

A primer

• It is because of their righteous conduct and commitment to the Constitution that some judges stand out.
• The travails of judicial life have been well catalogued, particularly withdrawal from society and the financial handicaps that accrue, but there are several who have sacrificed thriving litigation practices in order to offer their services to the public.
• These and others form the majority of the judges in our courts, and the few who are found to be otherwise need not discourage new candidates.
• What the new candidates do need, however, is a gentle primer on what pitfalls to avoid while they tread the path with gavel in hand.
• Lord Denning said, “Once a man becomes a judge, he has nothing to gain from further promotion”.

Power and Responsibility

• Flattery is often found to be a useful tool, either to toady up to judges in the collegium or to be at the receiving end of obsequious attention.
• As Burke said, it corrupts both the receiver and the giver.
• The reward is the office itself, and any puffery is utterly inconsequential.
• All judges should exercise independence. Even a puisne judge is a high constitutional officer in his own right.
• There ought to be no hesitation in disagreeing with a colleague’s unjust opinion no matter the gap in experience or reputation.
• Where the position becomes untenable, there is always the softer option of recusing oneself from the Bench.
• Recusals are indeed utilised for less palatable purposes by less agreeable individuals, but those are aberrations not to be emulated.
• It is important to be innovative. Digital screens and online databases have become integral tools to dispensing justice.
• They must show character. Even if many colleagues have relatives practising profitably in the same court without demur or receiving empanelments from corporations and governments, it does not create a new normal. As Charles Marshall said, “Integrity is doing the right thing when you don’t have to — when no one else is looking or will ever know — when there will be no congratulations or recognition for having done so.”
• Judges need fear nothing. With security of tenure and constitutional protections, a judge can remain undaunted by external influence, least of all by the executive.

Conclusion

• The true stars of India’s justice system are the thousands of judges who toil over dusty briefs.
• It is they who will never make headlines and never seek it, but take a clear conscience and a straight spine to their well-earned rests.
• For their sake, and for the sake of this nation, the time has come to induct a new generation of heroes.

COVID-19: MANY TASKS AT HAND

Focus: GS-III Disaster Management

Why in news?

• India has a formidable challenge ahead as it needs to control the disease, combat misinformation and protect civil liberties.
• As COVID-19 continues its global rampage, India has taken drastic steps to stem its spread.
• It has banned incoming international commercial flights till March 31, established rules of quarantine for those returning from abroad, and put its healthcare system on high alert.
• All this is justifiable given that its high population density makes ‘social distancing’ difficult.
• Also, a vast number of people depend on public healthcare, so tracking the spread of the disease is a formidable challenge.
• But to truly contain this pandemic, we need to make a distinction between scientific information that can support a balanced epidemiological response and misinformation that will adversely affect our efforts.

Access to healthcare

• From an epidemiological perspective, the weakest links during a pandemic are testing, control, and engaged community participation.
• So, the first step is to shore up the healthcare system and, as the World Health Organization has recommended, create capacity in hospitals (public and private) for everyone who shows symptoms to access testing facilities.
• Providing full and free testing to all who need it is critical for effectively controlling the spread.
• although access to healthcare has improved to a large extent in India, the polarisation of healthcare facilities between the private and public sector does not provide the right framework to channel timely medical services during a pandemic.
• In the short-run, public healthcare services will be hard-pressed to provide the requisite support to low-income groups.
• In the absence of clear and targeted actions to replenish their capacity, they will not be able to cope with the pressures in the longer run.
• This needs to be urgently addressed, in the absence of which the poor — whom privatisation and the market economy have systematically excluded — will now be the weakest link in any effort to contain the virus.

Fake News Issues

• The inexorable rise of fake news is a big threat to engaged community participation and public morale. COVID-19 is already deeply affecting economic activity, and fake videos linking its spread to the meat and poultry sector have led to a low demand for these products and, consequently, large-scale losses.
• Advocating particular cures or linking the virus to factors such as stress without underlying scientific evidence can cause a lot of damage as such misinformation creates confusion and prevents communities from following instructions from authorities and being united against the threat.
• Fake news also diverts attention from grim realities. The truth is that the economy will suffer drastically, and we need a clear plan of how we will tackle this over months.
• The poor will be the worst affected, including informal workers, workers in the gig economy, or those running small businesses, and social safety nets are not adequately in place.
• Sharing information on how we can address these issues and promoting democratic deliberations should become a policy and social priority.
• A crucial role of the government at this time is to offset panic, and to promote a sense of solidarity, stability and confidence. There can be no room for empty political statements and no space for errors.

Civil liberties

• There is also the risk that in the guise of disease tracking and control, we will fall into the trap of eroding more civil liberties.
• Lockdowns, curfews and travel bans are already a suppression of civil rights. We need to be clear of what measures we are embarking on, and how that affects all of us.
• For example, is it logical to suspend rights of our own people to return in case of absolute necessity, and does the epidemiological reason justify separating people from their families for any amount of time?
• As we move ahead, we need to employ mechanisms that tackle the pandemic no doubt, but do so while protecting civil and personal rights of citizens.
• The Chinese have massively re-purposed their surveillance system for epidemiological control to reduce infection rates, and the U.S. government has announced that it is in talks with tech companies to access phone location data to map the spread of the virus.
• The U.S., a democracy, has many checks and balances in place to ensure that this kind of data is not misused, but India does not.
• Indians therefore need guarantees that the use of surveillance in the name of disease control does not end up serving other purposes, now or in the future.

LONG LIVE THE NATION-STATE: THE COVID-19 PANDEMIC HAS DEMONSTRATED

Focus: GS-III Disaster Management, Governance

Why in news?

• The COVID-19 pandemic has demonstrated that the nation-state is not only alive but absolutely essential.
• Paradoxical as it may sound, COVID-19, a global menace, has demonstrated the resilience of the nation-state often portrayed as antediluvian by the advocates of globalisation.
• It has ended up strengthening the relevance of national boundaries as the major instrument for the control of the spread of the virus.
• One of the first things that governments have done is to close borders and stop international travel.

The principal barriers

• The COVID-19 outbreak has demonstrated that national boundaries are seen as the principal barriers to the spread of the disease.
• Air traffic across most state boundaries has either been halted or drastically curtailed and foreign citizens have been denied entry into national space.
• Even the search for a COVID-19 vaccine has become a matter of international competition.
• For the U.S., Europe and China, national pride is at stake in this race.
• National pride and national security issues have thus become irretrievably intertwined with the search to combat COVID-19.
• All this is happening while simultaneously political leaders and pundits are making statements daily about the urgent need for international cooperation to prevent the spread of the disease.

Identifying with governments

• Moreover, human beings obey orders not simply because they are issued but because they consider the issuing authority legitimate and, even more, identify with it at an emotional level.
• No matter how ineffective or bumbling national governments may be, their legitimacy as authoritative institutions is far greater than that of any competing institutions.
• People’s emotional identification with them because of the sense of national identity drilled into their consciousness from an early age also make them comparatively far more effective institutions for the enforcement of orders especially in times of crisis.
• It is no wonder therefore that the pandemic has also become a major source of resuscitation for the nation-state that for the last few decades has been facing challenges from advocates of globalisation.
• It has demonstrated that the nation-state is not only alive and well but absolutely essential particularly in times of crisis and that the rhetoric about its imminent demise is vastly exaggerated.