Kerala offers the rest of India a model to fight the pandemic – analysis
The calamities, it seems, bring out the best in Kerala. Whether it’s the 2018 and 2019 floods or the current coronavirus pandemic (Covid-19), the collective resistance and solidarity of the Keralites in religious and political divisions distinguish the state. It was in Kerala that the first Covid-19 case was detected in India on January 30, and exactly two months later, the state had 235 cases, the highest number reported in the country. Fast forward to April 16, the state recorded 394 confirmed cases, 245 recoveries and two deaths.
The credit for this incredible achievement goes primarily to effective grassroots government institutions and proactive, level political leadership.
People in the remotest corner of the state have access to medical care and ration shops, and, if necessary, the state government steps in to ensure that the basics reach those in need. Migrant workers make up almost 10% of the state’s population. Due to unequivocal communication, most of them left their homes after the state announced a partial shutdown, long before the national shutdown.
However, health is only one of many battles. It is time to confront the elephant in the room: to ensure people’s lives and livelihoods. If the first was a battle, the second is a war, something that state governments cannot fight on their own, without the Center leading from the front. New Delhi could take advantage of the lessons learned from Kerala’s battle for health.
Covid-19 is perhaps the most shocking economic crisis of our lives. It has reduced our needs to the basic necessities of life: food, medicine, electricity, water and communication technology. As the coronavirus stops the world, the crisis can kill millions due to famine and can even lead to serious civil unrest.
We have to think about crisis management and the stabilization of the economy and its recovery, which could even extend to the second half of 2021. We must be prepared for the long term.
India will need an economic stimulus package equivalent to 10-15% of its GDP. This is unlikely to cause inflation in the short term, considering low demand. Of course, it will exacerbate the fiscal deficit and public debt, but that should not be a major concern now. Several other countries have taken this route: the United States, the United Kingdom, Japan, Germany, Korea, Italy, France, and the United Arab Emirates. Japan, for example, announced a $ 1 trillion economic stimulus package, which is 20% of its GDP, while the package announced by India so far is below 1% of its GDP.
How the stimulus package is distributed to achieve the desired results is another important question. It is a difficult proposition in a country like India, with the majority employed in the unorganized sector. Over a period of three months, a considerable part of the aid package must be transferred directly to the accounts of the most vulnerable people, especially daily wage earners. In the organized sector, employers should receive an employment subsidy to help them keep people employed. For example, the UK government provides up to £ 2,500 per month per employee as a payroll allowance to the employer.
Such an unprecedented crisis requires proactive central governments and central banks, because only they can guarantee liquidity and cash flow. This is the time to seize the moment. Hard times don’t last long, but tough people and determined communities do. If Kerala can do so well against the virus, India surely can too.
VK Mathews is founder and CEO of IBS Software
The opinions expressed are personal.