At the seventh economic conclave – organised by State Bank of India held recently, the economists were unanimous on laying greater thrust on decentralisation of policy-making in future
The government can turn COVID-19 crisis into an opportunity by investing in healthcare, and it should also pursue making all the cities slum-free by 2023, according to economists.
At the seventh economic conclave – organised by State Bank of India held recently, the economists were unanimous on laying greater thrust on decentralisation in policy-making in the future, as a one size fits all approach may not work always.
India at present has the third-highest number of COVID-19 cases after the US and Brazil and has already lost over 22,000 people.
“It is very concerning that a lot of this discussion of the Aatmanirbhar (Bharat) package or other packages are not talking at all about what investments are taking place in the health sector. How much are we spending on testing, basic information campaigns? This is a health induced crisis, you got to respond to that to respond to the economy,” Rohini Pande, who is associated with Yale University, said.
India has historically under-invested in health and the increase is not very much right now as well, she said, stressing that we need to recognise that for economic recovery, humanitarian and health crisis are all interlinked.
“To change this crisis to an opportunity, let us invest in the health sector,” SBI’s chief economist SK Ghosh said, suggesting a plan to build a 500-bed hospital in 250 districts for Rs 60,000 crore over the next two years.
Pande said frontline health workers are not paid, and we can immediately start paying them and expand their base, which will lead to better case spotting and also contact tracing.
Arjun Jayadev with Azim Premji University said concerns on the health infrastructure affect the broader economy as well and pointed out that the animal spirits can only be rekindled once the fear of health shock goes away.
“Many migrant labourers may not want to return to the cities not just because they are not getting a good conducive environment to live, but they are bothered about their health condition as well,” he said.
The Indian economy runs on two gears – one which have access to expensive private healthcare and the others who don’t, Jayadev said, adding that universalisation of services should be a key theme while investing the money.
“You have this horrific situation where 5 lakh die of TB, 1.5 lakh children die and we don’t bat an eyelid, except when the situation comes to us as COVID,” he added.
Rathin Roy in National Institute of Public Finance and Policy (NIPFP) suggested a radical change in output measurement where gains on agriculture, health, education and housing become the lead indicators of economic strength rather than focusing on automobile sales and FMCG good sales.
Roy also proposed making a slum-free India as a policy objective by 2023.
“It is obvious from the migrant labour problem, it is obvious from the COVID situation that a slum-free India (by) 2023 should be our objective. I do not see enough economists, enough policymakers, even mentioning a slum-free India,” he said.
All the economists also seemed to agree that the Reserve Bank of India will have to monetise a part of the fiscal deficit this year due to the extreme strain on government finances, but did not offer a quantum or timeline.