Delayed lockdown exit can lead to loss of non-Covid lives: Basu

By Tamanna InamdarWhat’s your take on this lives versus livelihood debate that has been raging on for days now?The debate in the beginning was about lives versus the economy, which gives an artificial impression that one was about really living and the other was about the stock market. But it is far from that. The economy is important for our lives and livelihood, and I feel the way India has gone, the first steps were right. You do want to bring in discipline into people’s interaction with one another, you want to have a lockdown whereby the spread is kept under control, but you have to keep the economy in mind throughout. Otherwise, you will lose lives. One has to keep in mind that lives that are lost to Covid are usually recorded pretty well, because it is happening because of a disease. But lives due to people withering away because food is not reaching them get recorded much slower. So there is a genuine risk that among the poorest people, the migrants begin to take a hit and we will be too late.So here we face a very difficult choice. I do have some advice for India, because at one level India’s prospects are excellent in two particular sectors. When it comes out of the pandemic, the health sector is going to be a major beneficiary. I feel all over the world the way IT became a major sector in the 1990s, health is going to be that this time around. India has some initial advantages. From the preparation of vaccines to generic drugs, India is quite a major player. So if we do well, we can come out big there. In outsourcing and information technology, we have data but it is crashing right now because firms are closed, people are not doing this. But everyone knows this is going to see a surge in the future, and India has an advantage over there. But for that, we need an exit strategy from the lockdown -- a strong one, better one, quicker one, well defined one.There is a lot of work to be done there. I think there are some very big risks which we cannot overlook. The market is beginning to show up numbers from which there are risks that we may end up doing damage to the economy, which will be the great tragedy. Our first steps with Covid was right. Our prospects are great, but we could end up killing the economy.We have had nations opening up and then suddenly seen a rebound in numbers as well. Co clearly, that is the concern and it is nobody’s argument to open up the hotspots tomorrow or people go to restaurants. But do you think we are perhaps dragging our feet a bit on the economic side of it? Simple things, simple tasks just cannot happen now. It will take time to unlock an economy, ain’t it?Yes, absolutely. I want to actually give concrete examples. I feel very clear signals should go out from May 3 that a lot of the lockdown will have to remain, but details will have to go down. We have evidence from the past. One sector where the lockdown will have to remain for quite some time is education. During the Spanish Flu in 1918, the mega pandemic, schools had opened up too quickly, which caused a disaster. Formal studies show if schools had been closed for three months during the Spanish Flu, the spread would have been less. So, I feel schools should remain closed and there should be a clear announcement, say till June, the middle of June.But workers will have to get to their workplace. There are countries which are beginning to send out messages, transportation is going to open up carefully so that people are able to use the buses and cars begin to move. You cannot get together in one place in large number, but you are beginning to open up mobility. Vietnam is giving out signals and we can see in the data that the market is reacting to that. Foreign capital outflow taking place from India is bigger than from any other emerging economy, because global players are beginning to worry that India’s private sector is going to be strangled if we do not begin to open up intelligently. In March, $15 billion of foreign capital exited India, which has never happened before in recorded history. It is the biggest outflow. The rupee is weaker than it has ever been before. These are all signals that global players and the private sector are beginning to get worried about India. Given that we have done things right, this is a juncture where there should be clear statements. We want to allow our factories to open up under precautions. There will be rules about people getting together in one place. Allow transportation, but we will keep our schools closed. So it has to be a set of clear exit policies.The issue is two-pronged: one is that you cannot possibly just open up in green zones, supply chains are connected, some of raw material will come from what are orange and may be red zones. Second is, where is the labour? And the third, if I may add, is where is the demand? What do I produce if I am not sure anyone is going to buy?Let me address demand first. Take the software sector, and the outsourcing sector, where people sit in offices and respond to international demand. There has been a big drop in demand, but there is also data coming in to show that because people cannot get to their workplace, we are not being able to meet the demand that is there. So demand is going to be low for sure, but we have to create the space so that whatever demand is there, people are able to work. Because capital is not going to wait endlessly even for two months. They will go to Vietnam, to Mexico. There is data coming in that the Japanese government is putting a little bit more than $2 billion to facilitate Japanese firms to pull out of China. They are worried. But we know these firms are planning to primarily shift to Vietnam, Mexico, Thailand or Malaysia. India does not figure in that list. So we have to begin to open up, and it is true demand would not be very big, but we are signalling to the world that we are ready to go.One more thing I would want to point out is, when it comes to corona fatalities, the number is dime per population. India is actually doing very well globally. So I do not know how many people are infected, because for that our testing is not enough. We do know the fatality rate is reasonably well measured and India has actually done pretty well on this count along with a lot of South Asian and African countries and they have to take advantage of that.There are small risks when you open up, and we have to be candid that infections spread will pick up a little bit, but we have a strange resistance, which we do not understand, which is ensuring that it does not become quite as severe as it has become in Europe. So yes, be careful, but do not get into a fear psychosis causing a psychological problem in society that we are seeing some signs of.

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