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Covid-19: An Emergency Economic Manifesto – Analysis


India is now in a lockdown. Whether or not this blockade saves us from the dangers of coronavirus (Covid-19) disease is a question that will be answered in the future. But there is absolutely no doubt that the economy is suffering, and will continue to suffer tremendously, putting millions of Indians in grave danger. The urgent and immediate task for the next 21 days is to ensure that all citizens are saved from hunger and misery. Doing this correctly will require the Indian state to lead a relief effort that does much more than allocate budgets and offer stimulus packages. You will need to effectively coordinate and manage, at a minimum, the movement of people, the movement of food, and the movement of funds and schemes. In the next 21 days, our administrative machinery will face its greatest test yet. It will have to improve center-state coordination and ensure swift and decentralized administration, two things for which the Indian state is notorious for failing. To respond, the State must focus its capabilities in at least four critical arenas.

First, manage the movement of people. Images of hundreds of thousands of workers stranded at bus stops and walking home have dominated the news this week. When India closed its international borders, Indians around the world were given two or three days to return home. However, Indians living in India were not offered this luxury. Even before Tuesday’s closure announcement, states had begun closing their borders, and railroads also closed without warning or notice. The first thing for the Center to do is to establish a central coordination center that connects all interstate bus terminals to identify the places to which passengers should be taken and to work with state governments to deploy special bus fleets to carry people back to their homes. This will also require careful management and coordination between states so that information is widely shared and movement is managed in a way that avoids overcrowding and ensures safe passage. A national helpline should be established immediately to direct passengers and governments on where to deploy buses. Also, while passengers wait, state governments must make immediate arrangements for the provision of temporary shelter and food at these sites. Some state governments, such as Uttarakhand, have already started this process. This should extend to all major cities in India.

Second, the movement of food. In the days to come, the highly maligned Public Distribution System (PDS) will be the lifeline for most Indians. Many state governments have already expanded access to PDS, and the Center is likely to extend it throughout the country. The good news is that the government has a large stock of food grains and adequate stocks of legumes at its disposal. However, rations will have to be moved from reductions centrally administered by the Food Corporation of India (FCI) to states, districts and later to ration shops. Food needs are likely to vary from district to district. Therefore, states should urgently develop agile inventory management systems; and direct communication chains must be established between districts, states, and the Center to ensure supplies reach where they are needed. Over the years, some states like Chhattisgarh have developed sophisticated inventory management and tracking systems. They can take the initiative to coordinate this at the national level. At the end of the distribution, efforts are already underway to remove access barriers, such as biometric authentication and other documents. PDS now needs to move to a demand-based approach, similar to MGNREGS where any resident who approaches PDS receives a specific quota of wheat / rice and legumes.

Third, the procurement and supply chains for agricultural products, especially fresh produce, must be strengthened. The blockade has put agricultural markets across the country in crisis. Given the impending economic uncertainties, traders and wholesalers are nervous about buying and mandis They are closing, leaving farmers and merchants with nowhere to sell. In this context, the government needs to reopen and reassure both buyers and sellers in critical commodity markets. At a minimum, this will require three urgent steps. First, expand government purchases of fresh produce through state marketing federations, cooperatives, and agricultural producer organizations, whenever possible. Excess fresh produce can be deployed for use at the district level for extended noon meals and other food-related schemes that are implemented in the states. Second, open credit lines to merchants and buyers, remove all border restrictions on movement, and make sure that non-payment of commissions and dismissals from the Agricultural Products Market Committee does not impede mobility mandi Third closings, instead of closing mandis, adapt them to guarantee social distancing and safe transfer, handling and storage, especially during the high season of wheat acquisition.

Finally, movement of schemes and money. Our social protection administration is known for its unique and bureaucratic administrative approach that makes it difficult to spend on the front line according to felt needs. The current crisis calls for an expansion of current schemes, such as mid-day meals, ICDS-based complementary nutrition, and pensions. But states have varying levels of implementation capacity and are better positioned to determine which scheme can be effectively implemented to reach the greatest number of people at speed. Therefore, instead of ordering state governments to follow a uniform approach, the Center should create a set of unrelated funds, temporarily grouping their schemes into a central basket of funds that states can use and adapt as needed. States have already taken the lead in announcing state-specific aid packages. They are also at the forefront of implementation. A flexible funding mechanism will ensure that states can deploy resources in a way that leverages their strengths and ensures that support reaches citizens at full speed.

Responding to the coronavirus crisis requires careful communication and a coordinated approach at all levels of administration. At this point, however, the strongest message ever issued seems to be about the full implementation of the blockade and the need for uniform measures. But now, more than ever, India needs uniform results, not uniform measures. In fact, if we want to have a chance, we will need more agility, adaptation and flexibility in our implementation of emergency response and relief in the coming days and weeks. Command and control will not work for such a highly distributed and dynamic disease. And a national blockade cannot be sustained without a coordinated movement. The Indian State must face the challenge for its people and safeguard its future.

Yamini Aiyar is President and CEO of the Policy Research Center. Mekhala Krishnamurthy is a Principal Investigator and Director of the State Capacity Initiative, CPR, and Associate Professor at Ashoka University.

The opinions expressed are personal.

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