Registered with the Registrar of Newspapers for India under R.N.I 53640/91
Vol. XXX No. 2, May 1-15, 2020
We dare not, henceforth, dismiss calamities of global dimension as being outside the realm of probability. The tiny virus, of which there can be a million or more on a pinpoint, has humbled mighty nations. Though ruthless, it spares those who are back to simple practices that our grandmothers insisted upon at one time – wash feet, hands and face and gargle when you enter home.
Life must move on after the corona threat has abated, for the sun will still rise. The struggle for progress will resume. Recovery from an abysmal fall is not going to be easy because a lot of money is needed to repair the damage and return to the path of progress, but not enough is available. The resumed race may not necessarily be to the swift but to the bold, the innovative and the resilient.
Considering these limitations, we must make do with whatever we have. Whatever-we-have is not just our available monetary resources and institutional assets. It is also our discriminating sense to prioritise, ability to increase productivity and power of policy making. We must make money go farther; make existing assets and facilities work harder and yield more; and devise policies to facilitate employment-generating investment. The first calls for the bold pruning of expenditure of lower usefulness or of lower urgency, the withdrawal of which is a lesser disadvantage. The second is strict supervision demanding accountability for outcomes that fully utilise the asset. The third is to maximise ease of doing business. Thus, Prioritisation, Productivity, and Policy can soften the impact of monetary stringency to tide over the crisis.
Tamil Nadu’s challenge is quite tough as its finances allow only about 10% of the total expenditure for discretionary allocation. A revised Budget for the current financial year may be needed to present a fresh order of priorities. The bill for subsidies and transfers was estimated at Rs. 94,000 crores for this year. The outlay on subsidies covers food subsidy, power subsidy, scholarships, housing schemes, social security pensions and agricultural loan/interest waiver, cycles, laptops etc. Barring assistance that is critical such as food, shelter, health, sanitation, and schooling, all others could be suspended for a year – not withdrawn – implying assurance that when conditions become normal, their restoration would be reviewed. That should meet political taunts.
Tighter governance ensuring public health, family welfare, schooling, sanitation, and better reach of water supply services of higher quality would harness unutilised capacity of existing facilities. A crisis is the ideal environment to establish the habit of accountability for stipulated outputs.
The corona crisis has exposed policy and institutional insufficiencies in coping with health emergencies. If there is already an institutional mechanism for health disaster management, its capacity needs to be evaluated. It should accordingly be equipped with the latest technology and trained field network. This body should periodically audit practices that pose a threat to public health. For example, it is an irony that during the lockdown, which was meant to check the transmissibility of infection, sewage was still being discharged into two water bodies of the City, not only disabling these primary freshwater sources but, unintentionally, establishing a storehouse for the virus.
An overall master plan for upgrading public health facilities should identify areas for strengthening primary care coverage and capacity building by way of technical assistance and equipment. Public health, in its larger sense, should embrace all aspects essential for a high standard of hygiene and sanitation – say, collection and disposal of wastes, hygiene in restaurants, sidewalk mobile food counters etc. and last, but not the least, providing clean drinkable water in the tap. Why should clean water be sold in bottles making it an exclusive privilege beyond the reach of the poor? Projects that are already on board and are germane to public health should be speeded up – sewage collection and disposal, solid waste collection and disposal, stormwater drain capacity enhancement, disposal of dump yards, Adyar and Cooum restoration, the revival of water bodies around Chennai and desilting of water bodies in the districts.
As alcohol and petroleum are under the State’s purview, a levy on them to muster resources for a pre-specified temporary period is inescapable and justifiable, provided diesel is left untouched to avoid inflationary impact.
Corporate taxes are in the purview of the Centre. Perhaps the State could recommend some measure of compensating organisations that have been paying full salaries and wages during the lockdown without the opportunity to recover it through production. The cash drained by this social gesture must be allowed to be capitalised and funded, free of collateral, for repayment over say 3 to 5 years. The annualization of this capital over, say, 3-5 years gets accounted as expenditure reducing tax incidence and earmarking cash for servicing the loan.
Members of Parliament and of State Legislatures, public servants like Ministers, Speakers, Political appointees as heads of Public Organisations and Bodies must take a 10 percent cut in salary and allowances. Legislators of the Centre and States should be disallowed the salary and allowances for days when they do not attend the entire session.
Sacrifice or shramdhan, endurance of inconvenience for a temporary period, is a significant resource in times of crises. Sacrifice is passive when inconvenience is borne. It is positive affirmation when “pain” is borne to serve the common good. In the current context, it is a return of the hours that people could not work but got paid for during the lockdown. Say, an extra hour of work, with no overtime pay for, say, three days a week, for six months, would be voluntary that helps higher production and larger service coverage without corresponding cost. In Industry, an extra hour of production of goods and services reduces unit cost and increases profit to make up for the lockdown losses and smoothens the return of industry to normalcy.
Another fanciful idea cannot be resisted. Several establishments have functioned effectively with staff working from home. Periodic opening of offices, say, a couple of days per week, to supplement the virtual functioning, may become feasible on a regular basis. It reduces the need for large office space, reduces costs all round, places a lesser load on traffic, reduces pollution. Adversity might breed innovation.
The ultimate concern is the resumption of the economy to its growth momentum. After giving our best, one would like to hope, beyond technical soundness and niceties, that what we are going through now is demand compression, not contraction. When released from pressure, what is intact and compressed would regain its original fullness – economics obeying the laws of physics. There is room for optimism, also the need for preserving it, especially in trying times.