We are now in unprecedented times. The World Wars, the famines of history may have led to huge destruction
and deaths; but in no time has such an event like Covid-19 threatened humanity so comprehensively – its life, livelihood, work, and its business and economy.
Let us summarise the pandemic from three aspects – its origin, its effects, and the future. It is no use now blaming
China where it all began, though there are theories (and generally fanned by the US media) that it was a deliberate attempt to begin a biological warfare. What is more alarming is the environmentalists’ forecast that the man-made climate change has strengthened viruses to thrive on earth and such attacks will be more frequent nowadays. So, the world beware! In a way the steps taken for facing this pandemic is the beginning of a strategy to tackle a greater and more frequent war in the future.
At the moment there is no cure for the disease despite the billions spent on bio-medical research round the world. This is disturbing. A primitive form of prevention like ‘social distancing’ seems the only way out now. Many countries, especially in Europe and the US, took the warning casually and they are paying for it heavily, in spite of their advanced medical systems. India however, with all its backwardness, is in a better position because of its timely ‘lock-down’. But there is no reason for complacence because the infection and death figures are still rising, though at a slower pace.
The lock-down has been extended. But the question is for how long can this continue? Life has come to a standstill
everywhere. So has business. If Covid-19 kills humans, so will starvation. Sudden hold on transportation has stranded millions of migratory labourers in different parts of the country. Given the sheer scale of the problem and the efficiency of the public distribution system, the government’s assurances to feed them at different points are not very reassuring. And that too for how long? One positive aspect of the present situation is the food sufficiency of the country. If food corporation godowns are managed properly and the supply chain is maintained (including the last-mile reach), there should not be cases of starvation.
But how would you recover the economy? The IMF is predicting a global recession, worse than that of the 1930s. The rating agencies are predicting a growth rate for India at 1.5 to 2%. We perhaps will be lucky if the growth rate does not slide to a negative scale. The ILO claims that 40 crores of Indians will be pushed to extreme poverty. The automobile sector is predicting a slump in sales of about 25%. The joblessness during the lock-down period has soared to 23%. The rupee is sliding against the dollar.
Raghuram Rajan, the former RBI chief, warned that much of the essential customer services of global business is operating from India through the BPOs; and if the services slacken, which is already happening, India will slide into further trouble. Kaushik Basu, the economist, said the harvesting season is round the corner. Harvesting in agriculture is a labour-intensive work and the migratory labourers are all gone. The government has to work on an immediate plan to transport them back to work. Abhijit Banerjee, the Nobel laureate, judging the liquidity crisis of the country, advises the government to print currency and not worry about inflation and growth rates in this time of emergency.
Amartya Sen, the other Nobel laureate, however, is not so much worried about India’s future. He thinks that India’s economy is in a better position to recover from the Covid-19 shock within a year or two. We hope that he is right.