By S.G.VOMBATKERE & ASHA VOMBATKERE
Mangaluru, April 4, 2020: Setting a precedent, India’s 1.3-billion people are the world’s largest social-distancing lockdown population in the wake of the Coronavirus. The decision to lockdown at this scale with 4-hours “notice”, without adequate preparation and planning is being questioned. But condemn it or praise it, we are in its midst and it is necessary to handle the lockdown effects, particularly on the poor sections of the population for whom it is a survival issue.
Focus is on inter-State migrant workers, trapped far from home in a hostile environment, with no work, no money and no food.
The immediate issues of how to alleviate the suffering of hundreds of millions of poor who are undoubted victims of lockdown, and how to augment the pathetic hospital-bed-equipment-medical system are at the forefront. The unprecedented humanitarian crisis may well cause numbers of deaths to surpass Covid-19 deaths. That is in the darkening future, even as poor people increasingly argue that hunger is a sure slayer while Covid-19 is nowhere nearly as certain, discomfiting the “caring” government.
The national economy is also a victim of the Corona lockdown, which has delivered a body-blow to the already slowed-down economy, with damage yet to be assessed. Dark clouds loom large on the economic horizon, foreboding worse in coming weeks and months. A failed economy inevitably portends social and economic chaos, which must be avoided at all costs. The difficulty is to estimate when the presently failing economy may sink below the point of resuscitation, unless adequate and timely measures are taken to revive it, and what those measures could be.
Decisions concerning the economy need to be examined as a trade-off between damage to populations due to Covid-19 deaths versus damage to populations due to a failed economy causing further deterioration to the already poor health, education and welfare situations across all States. Another factor to be cranked into decision-making is how and when the current lockdown should be lifted, depending upon the spread of the Corona virus and possible re-emergence of Covid-19 cases. Decision-making in this increasingly complicated situation may best be addressed by war-gaming techniques rather than by ad hoc methods.
It is clear, perhaps even undisputable, that the trajectory of the economy especially since the 1991 New Economic Policy, has been in contravention of the Directive Principles of State Policy, particularly of Art.38(1) & (2), Art.39(b) & (c), and Art.48A.
Specifically, Art.38 speaks: “The State shall strive to promote the welfare of the people by securing ... a social order in which justice, social, economic and political, shall inform all the institutions of national life” [and] “to minimise inequalities in income ...”.
Art.39 speaks: “The State shall direct its policy [so that] ownership and control of ... resources are distributed to subserve the common good” [and] “the operation of the economic system does not result in concentration of wealth & means of production to the common detriment”. Art.48A speaks: “The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country”.
Successive governments have heeded the voice of the wealthiest and most influential sections of society in preference to the voices coming from the lowest layers of the socio-economic heap. Resultantly over the years, the Executive and the Legislative have institutionalized injustice, attenuated liberties, enhanced inequality, and in recent years destroyed fraternity, all of which the Judiciary has only partially mitigated in its more independent and fearless moments. The pillars of the Constitution have failed the People.
The economic paradigm of “progress” and “development” continues to be industrialization-at-any-cost in blindly chasing the holy grail of economic growth. It has pushed the majority of our 1.3-billion people to the economic margins, accentuated economic inequality in an already unequal socio-economic polity, and also destroyed the environment on which the economy itself is founded. Greed-driven violation of the Constitution has occurred precisely because, according to Art.37, the Directive Principles are not justiciable, making successive governments effectively unaccountable to the public. Have I digressed? I think not.
If the preambular principles of justice, liberty, equality and fraternity had not been blatantly abandoned by successive governments over the decades, today’s society would have been more equitable. It would have made the current social-distancing lockdown quite bearable, as it is today for the economically top 5% of India. But that was not to be. The lockdown-triggered mass exodus from cities and the ensuing humanitarian crisis is evidence.
At this juncture, Government has no alternative other than seeking to relieve the humanitarian crisis by cash hand-outs and feeding-the-poor. The better-endowed sections of society are coming forward in support, led by Azim Premji Foundation, Tata Trust and other corporates with huge donations, and RBI has cut the Repo rate, putting more money into circulation.
Notwithstanding, if the lockdown is extended or re-imposed after a break, the time is not far when money runs out and government is forced to print more currency to boost money supply. However, due to lockdown-induced near-total disruption of supply chains within and between different sectors of the economy, production of all kinds (especially food) cannot match up with money growth. This is the recipe for uncontrollable inflation, fatal to the economy.
In the current situation, perhaps Robin Hood may have suggested that all government servants and all government pensioners, as also all elected representatives and members of the judiciary, who are above a certain still-to-be-determined income level should accept a still-to-be-determined cut in salary/pension for a still-to-be-determined period, so as to release more money to handle the emergency. Further, corporations (not MSME) need to be directed to do likewise. All projects budgetted or in the pipeline which do not address poverty (e.g., the Central Vista re-development in Delhi, statues, etc.), should be shelved to release money.
Tax incentives and exemptions of at least Rs.18-lakh-crores from 2014-15 to 2018-19 as “Revenue foregone” benefitted corporates, and like amounts of public money were spent to rescue NPA-diseased PSBs and even private banks, when about 4,000 large borrowers account for 90% of NPAs. If corporates had been taxed and NPAs recovered, the correspondingly increased budget for health, education and welfare would have been in satisfaction of Art.38 & Art.39. Government owes it to the People to reverse this policy.
The justification for such measures lies in the logic that the wealthier sections have benefited from economic policies which have caused the poverty, and which now necessitate cash hand-outs and feeding the poor, who are driven to destitution by the lockdown.
The present situation is like being in an economic minefield, where a single false step may end in disaster. It calls for realistic assessment of the current economic situation by transparent consultation, and working within a timeframe. With the global economy apparently sliding into deep recession, time is not on our side. Such an assessment will permit resuscitation of the economy, and lead to the way out of the minefield, towards a people-oriented economy.
Resuscitation of the economy may only be possible by adopting change in direction of economic policy so as to be people-oriented, in keeping with the Directive Principles. Only then will there be meaning to the oath on the Constitution that public officials take on assuming office. Do our political parties across the board have it in them to understand the gravity of the post-Corona situation and join together to find a way forward hand-in-hand with the People? Only time will tell.