Monday, 30th October 2017

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Emperor’s clothes

Plans for the future must include the causes and extent of distress

  • Published 16.05.20, 4:14 AM
  • Updated 16.05.20, 4:14 AM
  • 5 mins read
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Union Finance Minister Nirmala Sitharaman wearing a face mask gestures as she announces the governments economic package to fight the coronavirus pandemic, during a news conference, in New Delhi, Wednesday, May 13, 2020. PTI

To adapt Voltaire’s comment on god, if Covid-19 had not erupted, India might have had to invent it to take the blame for a derelict economy, ravaged institutions and widespread impoverishment. The first phase of the prime minister’s new package did not bear out the hopes kindled by his ambitious “jaan bhi aur jahaan bhi (lives as well as livelihood)” mantra. The second promised something but the processes seem so convoluted that it’s an open question how much will be realized.

Narendra Modi’s unforgettable announcement that “this economic package is for the middle class of our country, which pays taxes honestly and contributes to the development of the country” laid the ground. The farmers that the finance minister, Nirmala Sitharaman, addressed on Thursday might have been Mehrauli farmhouse owners or film stars who have invested in agricultural land rather than sharecroppers or tenant farmers who rarely get bank credit, are exploited by moneylenders, face problems with minimum support prices and need funds for seeds and fertilizers. They account for 80 per cent of rural suicides. Some promises were repackaged old pledges. Others did not go far enough. Easier credit did not live up to Thomas Piketty’s recommendation of an immediate “basic income scheme and... a safety net”. No one can survive on savings while lockdowns are indefinitely extended.

Moreover, the promised Rs 20 lakh crore outlay turns out to be a much smaller sum once previous commitments and the cost of recoverable facilities are excluded — perhaps not much more than the Rs 3,500 crore cost of foodgrain supplies. An attempt to bring street vendors into the tax net cannot be passed off as relief. Neither can administrative measures like extending deadlines. Streamlining micro, small and medium enterprises may be of the utmost importance since MSMEs are reckoned the lifeblood of the economy but, again, necessary structural reforms do not amount to fiscal stimuli. Neither does tinkering with how much tax should be deducted at source or how much employers should pay into the provident fund kitty.

None of this can take precedence over the stark challenge of life and death. With casualties shooting up every day, the commitment to jahaan becomes meaningless if there is no jaan left to provide for. The government’s first priorities should be prevention and cure followed closely by measures to permanently improve healthcare and education. Not a list of promises that reads like an election manifesto.

Some confusion might have been avoided if the finance minister had also given the English rendering when she translated Modi’s Aatmanirbhar Bharat into four South Indian languages. Many others must share this writer’s bewilderment for Google’s search engine reports a spike in users seeking the meaning. No doubt it stands for a grand new India flowing with milk and honey, and, although this will not be said, draped in saffron. But this is no time for flights of fancy, gimmicky alliteration or boastful showmanship. India’s vision for the future cannot exclude an honest recognition of the extent of distress and its true causes. The finance minister referred to the pandemic as “an act of god” and “force majeure”. Whatever the relevance of these disputable legal concepts, there is no denying that while the pandemic has sharply aggravated distress, unemployment stared Indians in the face long before millions of penniless migrant workers began their painful trek to their home states.

A paper published by Azim Premji University claimed that employment dropped by nine million between 2011-12 and 2017-18, something that had never happened before. The 474 million employed persons in 2011-12 had shrunk to 465 million six years later. Jobs had disappeared. The economy had contracted. “This happened for the first time in India’s history,” the study said. Higher credit for MSMEs might arguably create some jobs in the long haul. Less tax and smaller provident fund payments might give a slight fillip to demand. But such illusory relief only delays the day of reckoning. The tax consultant who was quoted as saying that lower withholding taxes make it all the more essential for lower rate certificates to be issued expeditiously probably has some inkling of the difficulty individual taxpayers without institutional backing can face in obtaining them. Seemingly respectable employers can play ducks and drakes with provident fund and TDS payments and try to take advantage of well-meant concessions.

Meanwhile, it’s impossible to say how aware people are of the healthcare compulsions of the crisis. Newspaper pictures of people crammed into trucks and tempos, sleeping on floors or queuing for buses and shops do not indicate that Modi’s “do gaj doori” exhortations have much impact. The crowds don’t even bother with the token conformity of the finance minister’s mask hanging idly round her neck at Wednesday’s press conference. (It was abandoned altogether on Thursday.) It might serve some purpose if the government’s leaders emerged from what they themselves often deride as the cloud cuckoo land of Lutyens Delhi (where the finance minister regards a monthly income of “only” Rs 1.5 lakh as the “lowest rung” of the middle class) to notice that the multitude’s daily routine does not permit the luxury of two-yard social-distancing. Unless adequate transport is provided, another surge of infections is inevitable as schools, colleges, shops and offices reopen.

The “suit-boot ki sarkar” taunt seems also justified by official unawareness of the time it takes to mobilize funds, complete formalities and build a house, of the short shrift banks are likely to give a peasant who walks in from the road to demand a loan, and of how fearfully migrant workers must await the end of the two months when official largesse, such as it is, will end. Little thought seems to have been given to permanent job-creation. The finance minister also suggested the government had no idea of the number of people involved. While she harped on 80 million, some estimates mention 139 million. With communities on the move, families scattered over several states, and one card per family, no ration shop in the interior with limited stocks will easily be able to serve the “one nation one card” that has been exalted into a symbol of national unity.

The World Health Organization’s warning that Covid-19 will not go away as easily as ebola is a reminder that health spending should be a national priority. Despite a slight improvement in its global healthcare ranking, India lags behind Sudan and Equatorial Guinea, as well as neighbouring Bhutan, Bangladesh and Sri Lanka, to say nothing of peers like Brazil, Russia, China and South Africa. Of course there is a wide range of differences within India, between Goa and Kerala at one end, and Assam and Uttar Pradesh at the other, but, overall, the shortage of doctors, nurses, caring staff and hospital beds are national problems demanding immediate attention. Anupriya Patel, Modi’s former minister of state for health, told Parliament that “[a]ssuming 80 per cent availability” of doctors, the doctor-population ratio was 0.62:1000. The WHO prescribes a ratio of 1:1000. India’s 0.9 hospital beds per thousand people is less than one-third the WHO norm of three per thousand. A primary health centre with six beds at the most caters to 30,000 people in the countryside. The less said about quality the better.

All this is accepted without demur because India is Hans Christian Andersen’s original kingdom whose sycophantic courtiers applauded “The Emperor’s [“invisible”] New Clothes”. Dutifully veering from “local” to “global” (as instructed), commentators are “vocal” (another command) in comparing “twenty lakh crores in twenty-twenty” to P.V. Narasimha Rao’s reforms before soaring to the lofty height of Franklin D. Roosevelt’s “New Deal”. The innocent child in the fable who did exclaim that the emperor wasn’t “wearing anything at all!” might yet be echoed by some stranded farmer, dislodged hawker or — even — objective analyst.