When a black swan event is followed by a nation-wide lockdown , another black swan event, life comes to a grinding halt. When it comes without a modicum of planning, it not only throws life out of gear, it withdraws a life-line for many, especially when it happens in a country with large number of poor. It is then that many people become starving destitutes, waiting to die. This particularly applies to migrant workers, daily wage earners, construction workers and self employed persons with tiny businesses like rickshaw-pullers, auto drivers and thelawalas. Migrant and construction workers are often without documentation, ration cards and without a Jan Dhan account. The task of reaching them to provide succour during a lockdown is a challenge that faces state governments today. The Centre has thankfully come out with the first round of relief package. Though it claims to be of the order of Rs 1.7 lakh crore, it is actually for half the amount with some being advance from EPF account, some only increase in the lending eligibility, front-loading of existing schemes and questionably including money from the state government accounts like Construction Workers Welfare Fund and District Mining Fund. These are necessary but not sufficient to meet the requirement of India’s poor. Moreover, how the the relief measures will reach the end of pipeline during shutdown is a conundrum. Make no mistake — the shutdown is more likely to last beyond the initial three weeks and will probably will last for months in some form or other.There will be clamour for a stimulus package for business and industry. Given the devastation of the economy that the shutdown will create it will be required to jump-start the economy. But that is not immediately required. What is required is rescheduling and moratorium on loan repayments. This, when combined with deferment of tax payments, will avert default and unnecessary bankruptcies. The most important task now is to save lives from COVID-19 and the shutdown . In India, 90% people work in the informal sector which will remain untouched by stimulus package. Government will do well now to concentrate on human problems.Ricardo Hausman said “the more contained you want novel corona virus to be, the more you need to lockdown the country- and the more fiscal space you will require to mitigate the deeper recession that will result’”. The challenge now is to help people and households to survive and ride out the storm. “If people must choose between 10% chance of dying if they go to work and assured starvation if they stay at home, they are bound to choose work,” Hausman says. If they are not assisted during this time, not only hardship alone but real deaths can stare on their face.The relief package will make a lot of difference to rural India, where the coverage will be comprehensive, though there will be questions about their adequacy and the problem of long pipeline. However, in the urban area, the relief package will leave out large number of people and families. Poor in urban India may figure in some of the sub group of the schemes announced , but large number will be excluded from them. Migrant labourers are particularly uncovered by ration cards and Jan Dhan accounts or any other documentation. Construction workers have a welfare fund but not all are registered for construction workers’welfare fund. The Indian state’s capacity to reach and cover the urban poor at best has been limited. The problem of exclusion comes with the added problem of enormity. Of the 6 million slum dwellers in Delhi, exclusion of 10% mean more than 1.2 lakh households. Delhi had nearly 3 million migrant labourers, many of them are stuck as they could not leave on time. Rickshaw-pullers, autorickshaw drivers , thelawalas and small vendors are stuck. They are without earning and without ration card and Jan Dhan account. Starvation is staring at them. Even people who would receive money in their account cannot draw money if the curfew continues. Like King Midas, they will have entitlement, but no food or cash in hand.It is scandalous that in many government hospitals masks and gloves are not available. It is not enough that doctors and nurses are covered by insurance of Rs 50 lakh. Nor can they be exposed based on probability of risk of infection. One infected doctor is one less warrior and more importantly several others need to be quarantined. Centre should swing into action that this unacceptable condition does not continue.It is imperative that food reaches this excluded group. The lockdown needs to be redefined. All NGOs and grassroot workers should be allowed to operate and reach out to these groups. Food rations need to be packed and given to people who do not have ration cards but stuck in the lockdown. It was for a purpose that granaries used to be thrown open by the rulers in difficult times. It was meant to tide over targeting problem.Limited movement for drawing of cash from the bank should not be hindered. Skeletal transport service adhering to safety and distancing norm should be operationalised. The state government along with NGOs should open distribution centres for food packets or distribute them to identified groups. Some cash needs to be given to excluded persons once data base develops.What appears to impede the Centre is the lack of fiscal space. There is no priority for fiscal deficit and FRBM in a crisis of this order. May be ad hoc treasury bills need to be issued and fiscal space is to be created. Similarly a package for the states who are increasingly enjoined to take up more and more responsibility and constitute the only solid line of defence will be required. Another package will be required down the line once the learning comes, feedback loop starts working and hardship of people and states are understood. As blind Earl of Glouchester said to King Lear on the cliff, should not we all see the world “feelingly” during this crisis? Satya Mohanty is Former Secretary to GOI and currently Adjunct Professor of Economics, GGS Indraprasta University
