Covid-19: An emergency economic manifesto

ByYamini Aiyar and Mekhala Krishnamurthy
Mar 25, 2020 08:07 PM IST

To prevent distress, the State must manage the movement of people, food, money, schemes

India is now in a lockdown. Whether this lockdown saves us from the dangers of the coronavirus disease (Covid-19) or not 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 enormously, putting millions of Indians in serious danger. The urgent and immediate task for the next 21 days is to ensure that all citizens are saved from hunger and destitution. Doing this right will require the Indian State to spearhead a relief effort that does much more than allocate budgets and offer stimulus packages. It 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 biggest test yet. It will need to improve Centre-state coordination and ensure speedy, decentralised administration, two things that the Indian State is notorious for failing at. To respond, the State must focus its capacities in at least four critical arenas.

India needs uniform outcomes, not uniform measures. Command and control won’t work. Be flexible, work with states(Parveen Kumar/Hindustan Times)
India needs uniform outcomes, not uniform measures. Command and control won’t work. Be flexible, work with states(Parveen Kumar/Hindustan Times)

First, managing the movement of people. Images of hundreds of thousands of workers stranded at bus stands and walking home have dominated the news this week. When India closed its international borders, Indians around the world were given two to three days to make their way back home. However, Indians living in India were not offered this luxury. Even before Tuesday’s lockdown announcement, states had begun closing their borders and the railways, too, shut down with no prior warning or notice. The first thing that the Centre needs to do is to set up a central coordination hub that connects all inter-state bus terminals to identify locations that passengers need to be taken to, and work with state governments to deploy special fleets of buses to take people back to their homes. This will also require careful management and coordination between states so that information is shared widely and movement is managed in a way that avoids overcrowding and ensures safe passage. A national helpline needs to be set up immediately to direct passengers and governments on where to deploy buses. In addition, 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 begun this process. This must be extended across all major cities in India.

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Second the movement of food. In the days to come, the much-maligned Public Distribution System (PDS) is going to be the lifeline for most Indians. Many state governments have already expanded access to PDS and the Centre is likely to extend this across the country. The good news is that the government has a large buffer stock of food grains and adequate stock of pulses at its disposal. However, rations will need to be moved from the centrally-managed Food Corporation of India (FCI) godowns to states, districts and onward to ration stores. It is likely that food needs will vary district by district. Thus, states will have to urgently develop agile inventory management systems; and direct chains of communication between districts, states and the Centre will have to be established 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 lead in coordinating this at the national level. At the distribution end, efforts are already underway to remove hurdles to access such as biometric authentication and other paper work. The PDS now needs to move to a demand based approach, similar to MGNREGS where any resident who approaches the PDS is given a specified quota of wheat/ rice and pulses.

Third, the procurement and supply chains for agricultural commodities, especially fresh produce need to be strengthened. The lockdown has placed agricultural markets across the country in a crisis. Given the imminent economic uncertainties, traders and wholesalers are nervous about buying and mandis are shutting down, leaving farmers and traders 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 need three urgent steps. First, expand government procurement of fresh produce through state marketing federations, cooperatives and farmer producer organisations, wherever possible. The excess fresh produce can be deployed for use at the district level for expanded midday meals and other food related schemes being implemented in states. Second, open credit lines to traders and buyers, remove all border restrictions on movement, and ensure that non-payment of Agricultural Produce Market Committees fees and cesses do not impede mobility during mandi closures. Third, rather than closing mandis, adapt them to ensure social distancing and safe transfer, handling and storage, especially during the peak wheat procurement season coming up.

Finally, movement of schemes and money. Our social protection administration is notorious for its one-size-fits-all approach and administrative red tape that makes spending at the frontlines in accordance with felt needs difficult. The current crisis calls for an expansion of current schemes like the midday meals, ICDS-based supplementary nutrition and pensions. But states have varied levels of implementation capacity and are best positioned to determine which scheme can be deployed effectively to reach the most number of people at speed. So rather than direct state governments to follow a uniform approach, the Centre must create an untied pool of funding, by temporarily bundling its schemes into a core basket of funds that states can draw on and adapt according to their needs. States have already taken the lead in announcing state-specific relief packages. They are also at the forefront of implementation. A flexible mechanism of funding will ensure states are able to deploy resources in ways that play to their strengths and ensure that support reaches citizens at speed.

Responding to the coronavirus crisis requires careful communication and a coordinated approach across all levels of administration. At this point, however, the loudest message that has been delivered seems to be about complete enforcement of the lockdown, and the need for uniform measures. But now, more than ever, India needs uniform outcomes, not uniform measures. Indeed, if we are to have any chance at all, 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 lockdown cannot be sustained without coordinated movement. The Indian State needs to step up to the challenge for its people and for safeguarding their future.

Yamini Aiyar is president and chief executive, Centre for Policy Research. Mekhala Krishnamurthy is a senior fellow and director of the State Capacity Initiative, CPR and associate professor, Ashoka University
The views expressed are personal
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