Politics and religion are often intertwined in India and hence there can be nothing wrong in congregations, irrespective of the situation. This is so true today where we have witnessed millions of people participating in the rallies of all political parties, including the ruling NDA. Such congregations have not required people to be tested for Covid before attending the rallies. The same holds for the Kumbh Mela in Haridwar, where there is an SOP asking for procuring negative Covid reports.
It would be disingenuous to believe that this is being adhered to, given that the pilgrims arriving for the festival would tend to be from the hinterland with limited education and will not have access to testing facilities. In this situation, does it not make the strict lockdown guidelines being pursued in Maharashtra seem very odd?
Act of desperation
The lockdowns in Maharashtra and other states have evidently been done out of desperation. States have just not managed to get people to wear masks to stop the spread of the virus. The solution is to stop people from coming out. One cannot be sure if this will help to break the chain and ensure that by April 30, the number of new infections get reduced.
In fact, post-elections in the five states, one may expect a surge in the number of cases provided people get tested. It is clear that cases rise when tests are conducted. In non-metro-urban areas, the level of infection is lower due to the absence of testing facilities. It looks like we have got entered another loop from which it will be hard to come out if the caseload does not decrease.
This time round, no state government can exculpate itself from blame because there was a pattern in the rise in cases and given the experience of last year, plans should have been in place. It is typical Indian hubris, talking big about being the fastest growing economy in the world which comes in the way of judgment, as it was believed that the second wave would not come to India because we killed the virus completely. Now, it looks like we have been taken by surprise and the unfortunate part is that there is no help being extended to the displaced people.
Just getting back
Businesses in the service sector were just about trying to get back on their feet and closure in Maharashtra means a loss of livelihood. This gets aggrandised as most of these services have borrowed funds to keep their businesses going, which have to be serviced. There has been no signal given by the government or the RBI that something will be done about it.
Second, the loss of jobs looks likely again, as there is uncertainty of the future of the lockdown and the same units i.e. SMEs have been buffeted more with all the restrictions in place. There have been no announcements of free food or camps or cash transfers. The Centre believes it is a localised decision and the local government makes it sound as being inevitable because people were careless. But isn’t it the duty of governments to support businesses which are forced to close down?
Ameliorative measures
How can this be done? First, the licence fees for various operations could be withdrawn for the year, or reduced, depending on the length of the lockdown. Second, the local taxes that have to be paid, which could be municipal taxes, could be waived on a pro-rata basis. Third, the corporate tax should be lowered, again on a pro-rata basis. Fourth, cash transfers to the registered employees of SME units should be made so that workers do not go running back to their hometowns. Fifth, utility charges could be waived or compensated for kiranas, malls and theatres, which are not functioning but still have to pay the minimum charges. Sixth, just like the emergency line of credit was extended to SMEs by the Centre, individual states should do the same and provide guarantees and subsidise the interest payment for this year.
Today, there has been so much controversy on the issue of vaccination that it is hard to sift the truth. The fact is that there is a shortfall of vaccines in Maharashtra. It is also known that there is a limitation on the number of vaccines that can be produced by the two companies: SII and Bharat Biotech.
The logical solution is for the Centre and states to immediately release grants to them to scale up operations. The vaccines are being provided at lower than the commercial cost, which is not sustainable. It is the duty of the government to spend this money and ensure that facilities are supported fully so that the population is vaccinated.
Governments need to rise and display statesmanship. In the midst of the pandemic there was an assurance given that the entire population would be vaccinated at government cost. Subsequently, when it was out, the statements made were that not all people needed it. This was further diluted, saying that only frontline workers would get it free and the others would have to pay for it. It is a clear case of the fiscal pressures coming in the way of fulfilling a commitment.
Maybe priorities should be redefined and instead of having new highways and bullet trains, resources should be first diverted to financing the production of and administering vaccines to all. This is the need of the hour.
The writer is Chief Economist, CARE ratings. Views are personal
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