Opinion | The government blinks as the virus throws it a curveball
4 min read . Updated: 25 May 2020, 06:49 AM ISTMost statistical graphs point to a grim future and our State responses seem out of whack with realities
There is a renewed emphasis on curves. Most business and economic trends are expressed through graphs, particularly curves, that explain linkages between key variables. After the emergence of the novel coronavirus, different curves now dominate our quotidian lives. One set of discussions focuses on flattening the curve which depicts the number of people contracting the disease. Then there is the stock market curve that resembles a craggy mountain range as indices swing wildly between fear and hope, mirroring the economy.
At their core, data trends represented through charts and graphs tell a story, sometimes even indicating how a particular current trend might evolve in the future. Combining a set of curves from current trends in India presents a rather disturbing picture of the future, one that could give rise to a skewed balance of power and social strife.
Let’s untangle these curves one by one.
Economic recovery from this crisis is also being imagined through the shape of curves, with most economists settling for a V, U or W shaped recovery process, with an S occasionally creeping into the conversation. One cynical wag even suggested that economic recovery might be shaped like a bathtub if remedial measures are not implemented urgently.
So, what will India’s recovery curve look like? The Indian government’s response to the economic and humanitarian crisis has been manifestly behind the curve, even though it was presciently early in enforcing a total lockdown. The International Monetary Fund’s recent chart on G20 countries providing fiscal support during the pandemic ranks India 13th, with liquidity and guarantees far outstripping fiscal measures.
A part of this skew can be traced to the government’s ideological disposition, which curves to the right, assigning priority to the supply side with a marked accent on offering tax cuts, concessions and other incentives to industry, rather than focusing on redistribution to address the monumental human suffering caused by the covid-19 pandemic. This column is not even suggesting demand stimulation; the time for that will come later. The country needs to first address the catastrophe that is unravelling across national highways.
The government’s multi-tranche stimulus programme contains little by way of direct assistance for affected sectors or individuals. Various studies have shown that the package amounts to about 1% of gross domestic product, which is staggeringly low, given the magnitude of the problem. As Yamini Aiyar, CEO, Centre for Policy Research, and economist Rathin Roy, director, National Institute of Public Finance and Policy, pointed out in a recent webinar, the structural reforms announced are part of a business-as-usual economy, not one battling an extraordinary catastrophe. Plus, the onus on recovery has now been shifted to firms and households.
The irony is that in the midst of a humanitarian crisis, the government seems to have rushed to the aid of industry.
But there is another, greater, irony. As the government lines up public sector units for sale to the private sector, it appears to have quietly begun occupying other spaces in ways that impinge upon fundamental rights. This column on April 27 had mentioned that once the world returns to normal, however that normal is defined, dislodging the State from such spaces will be a challenge. Both the State and big industry are now assigning greater powers to themselves at the cost of the individual.
Different states are falling over each other to abrogate fundamental labour rights. Uttar Pradesh, Madhya Pradesh, Gujarat started off a competitive race to abolish existing laws that provided labour with certain rights. The Karnataka government even tried to forcibly detain migrant workers returning home so that industry had access to a ready labour pool for resuming activity.
It has been this government’s long-term project to overhaul existing labour laws. It even introduced The Industrial Relations Code, 2019, in the Lok Sabha last November to replace three existing labour laws—the Industrial Disputes Act of 1947, Trade Unions Act of 1926, and the Industrial Employment (Standing Orders) Act, 1946. The code was duly referred to a standing committee, which submitted its censorious report on 23 April 2020, in the midst of the lockdown.
It is time to introduce another curve. The states that initiated the dilution of labour rights are also in the process of receiving millions of migrant workers returning home. According to a recent analysis by Mint’s team of data analysts, testing for coronavirus has been the lowest in these states.
So, here are all the conflicted curves. Instead of using the pandemic as an opportunity to invest in increased testing and healthcare infrastructure, if not saving livelihoods, the government is raising foreign investment limits for the defence sector. Instead of investing in social security to improve the pool of human capital and burnish Make In India, the government is busy attenuating labour rights.
Social cohesion is already fraying as distancing dominates lives, trust takes a back seat and the State abandons millions of the poor alienated from their means of livelihood. An unfair rebalancing of negotiating power that favours the State-industrial concord at the cost of labour is likely to further chafe that fabric. Progress down this road could be like the curved flight path of a boomerang.
Rajrishi Singhal is consulting editor of Mint. His Twitter handle is @rajrishisinghal
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