A crisis is also a great opportunity to push through behavioural changes that are difficult to incentivise otherwise. People, for instance, ignore health advice to wear face masks to protect themselves from severe air pollution. But the virus has managed even the most intransigent of them to cover their faces.
PTIThe biggest crisis India faced was the helplessness of domestic migrant workers during the lockdown.
The nCovid19 pandemic has created the biggest economic disruption in living memory of most Indians who also form the largest national cohort of working age men and women on planet earth. The country currently is at a stage where no one is able to say with any degree of certainty how much the germ has spread. The contagion also appears to be following a unique pattern—slow, unpredictable and unlike other countries, affecting relatively younger population as well. Yet, it is also kindling the hope that it would do comparatively limited damage.
It is also possible that in the final tally emergency preventive measures may cause a bigger dent in the economy than the virus itself. But all wars, whether against a visible enemy or an invisible blob of toxic protein, have a cost and must be borne. Telangana chief minister K Chandrasekhar Rao announced a pay cut for government employees, including a 75% cut for all elected representatives. Rao had earlier said that the treasury was facing a loss of Rs 12,000 crore due to the lockdown.
Further south, Kerala is arguably the state with the best public healthcare system in the country and has also been widely acknowledged for its systematic and planned fight against the virus pandemic. Its battle has come at a heavy cost. Chief minister Pinarayi Vijayan has said that the state may not be able to pay April salaries because the treasury was empty. Instead he has asked employees to give up their salaries for a month. Vijayan emphasised that Kerala has given up a lot of revenue to ease the hardship of people, including migrant labourers whom he calls guest workers.
The union government announced a Rs 1.7 lakh crore package and the RBI too pitched in with additional liquidity for banks and relaxation of loan repayments. High level discussions between the prime minister’s office and the finance ministry also considered relaxing fiscal responsibility norms. One note that ET reviewed suggested a fundamental review of the economic strategy, including considering relaxing the budgetary fiscal deficit target of 3.5% by 1 percentage point to begin with, and more, if required.
For administrators and policymakers, however, it is time to think and plan for peace-time stabilisation and rebuilding. One plan could be to charge up new engines of economic growth, job creation and income generation. The biggest crisis India faced was the helplessness of domestic migrant workers during the lockdown.
The Economic Survey of 2016-17 had estimated that about nine million workers migrate within the country annually in search of work. The cities which attract the largest number of migrants from other states seeking work are Delhi, Surat, Mumbai and Bangalore in that order measured by the proportion in total migrants. These cities are followed by Ahmedabad, Pune, Kolkata, Chennai and Hyderabad which has the smallest—7%--population of out-of-state migrants, according to Census 2011. Delhi attracts the largest number of migrants, predominantly from Bihar and Uttar Pradesh, the youngest states in the country by median age and which send out the largest number of people in search of work.
ET has earlier reported how a large swathe of the country—the giant region that lies between Delhi, Kolkata and Nagpur—doesn’t have a big metropolitan city to drive economic growth. This triangular region, however, has several smaller cities and towns—Patna, Bhubaneshwar, Varanasi, Lucknow, Kanpur, Allahabad, Agra, Aligarh, Kota, Raipur, Indore, Bhopal—that have a population of over a million and the potential to scale up with proper planning. All these cities also have some sort of a base with thousands of small-scale industries and land around them to spread. The government already has plans to develop many of these as smart cities. That initiative should get a fillip.
Many migrants who fled to their native villages may not return, preferring to eke out a living from their marginal farms or odd jobs in nearby towns. Experts anticipate a situation where wages for casual workers would go up in industrial clusters for want of enough hands yet thousands of workers elsewhere searching for non-existent work.
It would not be possible for governments to support the unemployed for a long period. In the short term, one way could be to expand the MGNREGA framework to provide temporary employment to jobless workers in small towns too. Many towns and small cities have plenty of unfinished public works and civic infrastructure that needs to be built. Small private contractors and tiny industrial units (eg: that make masks and sanitiser) who undertake such works and need unskilled hands could be supported with MGNREGA labour. It could work like a concession in stressful times. It would be even better if wages under the scheme are raised which would help increase incomes and purchasing capacity at the bottom of the pyramid. Of course, it should be accompanied by strict milestones and close monitoring.
The key learning for migrants from this crisis, as S Irudaya Rajan of Centre for Development Studies told ET, is that distance matters. The government should, hence, prepare a massive investment programme in the public-private-partnership mode in these towns to upgrade physical and social infrastructure. Delhi’s hinterland, for instance, should become the focus of government intervention.
Lessons, systems and processes from Indore, which has consistently topped the clean-city rankings, and Kerala’s public healthcare delivery can be replicated quickly in these cities. Corporate help, both in funds and expertise, could bolster government efforts. Rapidly growing cities in the north will not only create new growth engines, they will also ease pressure on the other metros which are now bursting at the seams.
A crisis is also a great opportunity to push through behavioural changes that are difficult to incentivise otherwise. People, for instance, ignore health advice to wear face masks to protect themselves from severe air pollution. But the virus has managed even the most intransigent of them to cover their faces. This crisis could and should be used as the big nudge to push fundamental change.
PTI
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