Corona Crisis: Can India Overcome Effects of Disastrous Policies?

It is time to sit back and objectively reconsider the ‘draconian’ policy measures unleashed in India.

5 min read
Corona Crisis: Can India Overcome Effects of Disastrous Policies?
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It’s been three weeks since the WHO declared the COVID-19 outbreak a pandemic. It is not the world’s first coronavirus. We have had SARS, MERS, H1N1, swine flu, and the like, some with much higher cases of fatality. But this is unique in its sweeping virulence. The Centers for Disease Control and Prevention (CDC) says that the annual percentage of the US population infected with the flu is about 8 percent, which translates to 26 million people a year. Of these, the CDC estimates that up to 60,000 persons die. It stands to reason that many more in India get afflicted by flus and influenzas each year, possibly with larger fatalities.

Given this knowledge and some very recent hindsight, it is time to sit back and objectively reconsider the draconian policy measures unleashed in India.

The four hours to midnight order for a nationwide ‘curfew’ to enforce social distancing has caught our public and public administration woefully unprepared. The impact of COVID-192 on the Indian economy and consequent loss of lives and longevity, seems very likely to exceed the loss due to any mass spread of the virus.


Essential Facts About Coronavirus Pandemic

Epidemiological studies, put out at several well-regarded institutions such as MIT and the Global Virus Network (GVN), seem to suggest that this particular coronavirus is endemic in populated areas falling in temperature band of 3-17ºC with a humidity between 51-79 percent. These initial findings suggest a correlation between latitude and incidence, and have the powerful endorsement of Dr Robert Gallo, the famed virologist and GVN head.

Mind you, it has been just a few months since COVID-19 jumped species by finding home in human beings. The novel coronavirus’s natural reservoir seems to be bats, like the earlier coronaviruses SARS and MERS. But the fact remains that the spread of COVID-19 has been faster in areas with colder climes.

The essential facts about COVID-19 is that while it is virulent, its fatality is around 1 percent, and this is principally concentrated among the elderly and already ailing.

Its symptoms are mostly akin to common seasonal flus often attributed to change of season etc. The coronavirus can only be confirmed by testing, and the cheapest test costs about Rs 5000 each.

Clearly, we cannot afford to test enough, which simply means we won’t ever know how many are truly afflicted by COVID-19.

India’s Fighting Capacity

The average life expectancy of Indians is 68.7 years. The above 65 years cohort accounts for only about 6 percent of India, which suggests that the incidence of fatality here will be lower. The bubonic plague had a mortality of over 80 percent, while even diphtheria has a mortality rate of 32 percent. COVID-19 is therefore, not a ‘killer virus’. In developed countries like the US, Italy and elsewhere, with substantially higher life expectancy, the 70+ years cohorts are much bigger.

The mortality rate due has been the highest in Italy with about 9 percent. Almost 86 percent of the Italians who died were over 70 years of age. Italy has the second oldest population in the world after Japan, with over 23 percent over the age of 65. Experts believe this was the determining factor in its high fatality rate.

The goal of social distancing is a hugely unfulfilled aspiration.

The poor in India live cheek by jowl, with densities often exceeding 60,000 per sq. miles. India has over 410 million workers in the unorganised sector, the vast majority of whom are daily wagers making a little more than the prescribed official wages, and often much below that.

This working age cohort is mostly made up of younger Indians. The youthful age group (14-35 years) accounts for about 34 percent of India’s population. This cohort is about as much as the 35-65 years cohorts. Thus, even if the pandemic is real for India, the fatality due to it will be very low. The vast majority of Indians who might get infected by COVID-19 won’t even know it.


India’s Abysmal Healthcare Capacity & Infrastructure

Now assume that the COVID-19 pandemic will overwhelm India, and consider India’s abysmal healthcare scene. We have 6 physicians; 9 hospital beds and 13 nurses per 10,000 people. Nationwide we have less than 40,000 ventilators, and only 70,000 intensive care beds (ICU).

This calls for a policy that will help stagger the load and allow immunity to build up without overwhelming the critical care system.

Harvard’s Yonatan Grad, Professor of Immunology and Infectious Diseases, and colleagues, conducted research on how to prevent overwhelming the US healthcare system during the pandemic. This indicates that the only possible method for dealing with the crisis may be multiple “intermittent” social distancing periods that ease up when cases fall to a certain level, and then are reimposed when they rise past a key threshold. As time passes and more of the population gains immunity, they said, the restrictive episodes could be shorter, with longer intervals between them. Clearly, the nationwide simultaneous social distancing imposition was ill-conceived.


Amidst a Global Recession, What Steps Should Modi Govt Take?

The IMF has now announced a global recession due to disrupted supply chains and contraction of consumption. In India, consumption (C) accounts for 63 percent of GDP. Given GDP is = C + I + G + (X – M) or GDP = private consumption (C) + gross investment (I)+ government investment + government spending (G) + (exports – imports), the impact of the collapse of private consumption of the economy can be easily understood. Many respected analysts are agreed that it will be no less than 20-30 percent in Q1. The government pledged to step up its spending by Rs 1.7 lakh crores. We won’t go into how this was arrived at now, but just consider how inadequate it is compared to the hit taken by consumption?

The government clearly needs to do more. It needs to pull out all the stops to do this.

Where is the money – is the question. Even if it sequesters 20 percent of the cash reserves with our 100 corporations, it will be substantial. The top 10 corporations alone have a hoard of over Rs 10 lakh crores. (Reliance has cash reserves of Rs 398,000 crores. TCS has almost Rs 100,000 crores; ITC has Rs 60,000 crores).

Our government wage and pensions bill accounts for 11.4 percent of the GDP. Holding back only 10 percent of this or just the annual LTC, will fetch the state and central governments over Rs 2 lakh crores.

It only calls for will and vision to accumulate the cash to begin reconstruction of a devastated economy. The pain cannot and must not be borne by the poorest alone. PM Modi has formidable communication skills – and he must use them now.

(The author is a well-known economist and policy analyst. He tweets @mohanguruswamy. This is an opinion piece, and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)

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