At the end of one year since the onset of Covid-19 crisis, India can take pride in its accomplishments in at least four areas.
First, at 11.9 per 1,00,000 individuals, death rate due to Covid-19 stands at the lowest in India among the 20 most affected countries. The corresponding rate in Czech Republic, the country with the highest death rate in this group, is 235.8. India fares almost equally well in terms of deaths as per cent of total infections. With its value at 1.4%, it ranks 19th among the 20 most affected countries. Only Turkey in this group does better than India with a case-fatality ratio of 1.0%.
Second, India has done better than its peers in handling the economy. With the US and many European countries committing themselves to mega fiscal transfers, the pressure on the government in India to do the same was immense. But it recognised that with the movement of people outside their homes highly restricted, fiscal transfers could not translate into effective demand. And even if they could, with missing workers and broken input-supply chains, supply response to increased effective demand would have been lacking.
Therefore, it limited its early fiscal intervention to the provision of shelter and food for all. Subsequent evidence on personal savings in the rich countries testifies to the soundness of the path India chose. The Economist recently studied post-Covid-19 savings behaviour in 21 rich countries. It estimates that absent the pandemic, households in these countries would have saved $3 trillion during the first nine months of 2020. In reality, they saved $6 trillion.
Income transfers, thus, substantially failed to translate into effective demand. The excess savings amounted to full 10% of annual consumption spending in these countries. The Economist predicts that excess savings in the US would soon exceed 10% of GDP.
The restraint exercised in the early months gave India fiscal space to stimulate the economy subsequently when buyers were able to return to shops and workers to their workplaces. This expansion carries greater promise of aiding recovery and returning the economy speedily to its pre-Covid-19 path. On a sequential basis, high frequency indicators do point to a steady recovery in the second half of fiscal year 2020-21.
Third, many media commentators had written urging the government to take the opportunity offered by the crisis and enact the pending reforms to place the economy on a high growth path in the post-Covid-19 decade. What the government has done in this area has surprised even the most ardent supporters of reforms.
It has enacted the long awaited reforms of labour laws and farm laws and announced the roadmap for large-scale privatisation and de-stressing of the financial sector. Recently, it amended numerous highly restrictive clauses of the Mines and Minerals (Development and Regulation) Act of 1957. Next, it is poised to give entry to private players to build a payments clearing platform that would complement and compete with the existing Unified Payments Interface platform.
Finally and perhaps most importantly, India can take great satisfaction in its many accomplishments in the area of Covid-19 vaccine. One, other than China, which is economically five times richer, India is the only developing country to develop a vaccine indigenously. Two, the country has expanded manufacturing of Covid-19 vaccines at breakneck speed to become the world’s major supply source.
Three, true to its “vasudhaiva kutumbakam” tradition, India has shared 60 million units of its vaccines with 75 countries. Four, it has taken the initiative to propose and persuade Quad members to invest in its highly developed vaccine manufacturing ecosystem to offer the countries in Southeast Asia an alternative to the Chinese vaccine. And, finally, it has created a system of vaccine delivery to its people that rivals the best in the world.
On this last point, let me offer a comparison. New York had opened up vaccination to its 65-plus population in mid-January. But the challenges of getting an appointment within walking distance were so great that I could get my first shot only on March 21. Even this became possible only after continuous web searches multiple times each day for more than two weeks.
In contrast, my older brother in Jaipur could walk to a nearby clinic without appointment and get his first shot within half an hour. Using his Aadhaar card, the staff at the facility registered him on the national portal and recorded the fact of his having received the vaccine. Even before he had left the clinic, he had received his digital vaccination certificate with QR code, date and type of vaccine and the name of the clinic on the letterhead of the ministry of health and family welfare. My equivalent of this certificate in New York City was a hard-copy card with the same information filled in hand by the nurse administering the shot.
Critics can surely point to travails during the year such as the plight of migrant workers in the wake of the strict lockdown, farmer protests and the latest spike in infections. But the criticisms pale in comparison to the enormous accomplishments during what has been one of the most trying years in post-Independence history.
Views expressed above are the author’s own.
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