1) The Maoist trap: On killing of security personnel in Sukma
The attack by Maoist extremists in Chhattisgarh’s Sukma district on Saturday, that killed 17 security personnel and injured 15, including two critically, presents a grim picture on how poorly India continues to fare on this front.
There was intelligence that Maoists were going to assemble at Elmagunda village, which is dominated by the Peoples’ Liberation Guerrilla Army Battalion 1.
Accordingly, security forces, comprising District Reserve Guards, Special Task Force, numbering 500, were dispatched into the forests to deal with the emergent situation.
In retrospect, despite the intelligence, they did not encounter even one Maoist and began their journey back, in two groups, to their camps at Chintagufa and Burkapal, not more than six kilometres apart as the crow flies.
The smaller contingent, numbering 100, headed to Burkapal, encountered fire six kilometres from the base camp and they duly returned it.
The Maoists retreated and fired again and the security forces fired and followed till they had been lured into an open area in hilly terrain where the Maoists, some 350 of them, had the advantage of numbers, line of fire as well as height, a classic ambush.
The Maoists then picked off their targets.
The other much larger group, not more than three kilometres away, also came under diversionary fire that kept them pinned down.
The real story is still to emerge, but it is odd that in the battle that began about noon and lasted five-and-a-half daylight hours, reinforcements could not be sent to hapless personnel.
It can be surmised that at the very least those who got ambushed did not know the terrain or the tactics enough, although that should not be the case considering the composition of the DRG.
It is yet to be convincingly explained how as many as 400 personnel so near did not rush to aid their uniformed brethren.
Was it a leadership or assessment issue? Was there a communication breakdown? Was the initial intelligence properly vetted or was it bait? Was this entire operation properly supervised?
It is remarkable, too, that helicopters were able to evacuate the wounded afterwards.
So complete was the rout that even though the security forces said they took down some Maoists, there is not much physical evidence to support this claim.
It is also significant that as many as 13 of the dead security forces were locals from Sukma district, many of them surrendered Maoists.
And unfortunate that many of them bled to death waiting for assistance.
There is a lot to answer for but it seems that despite dedicated training the security forces get for just these eventualities, the Maoists are able to improvise and come out on top, smarter, nimbler, and many steps ahead.
In difficult terrain, security personnel end up second best despite the training
2) Lockdown and beyond: On India's response to coronavirus
India has responded to the spectre of large-scale transmission of the novel coronavirus and the unprecedented public health catastrophe it may bring by ordering a full national lockdown.
The goal is to flatten the transmission curve and help a frayed health system cope with a large number of cases.
Physical distancing of people, ensured through a suspension of rail and inter-State bus services, closure of public places, cessation of all non-essential activity and street-level monitoring, is the first order priority during a pandemic and the lockdown can ensure that.
The options being used by States to enforce this are Section 144 of the Criminal Procedure Code, the Epidemic Diseases Act, 1897 and the Indian Penal Code.
GALVANISING GOVERNMENT MACHINERY:
What must follow is the galvanising of governmental machinery to address essential requirements.
This was certainly not in evidence on Sunday during the janata curfew, which saw near-total compliance, but culminated in noisy public celebrations.
It was also marked by a last-minute scramble among migrant labour stuffing themselves into trains to return home ahead of the shutdown.
Many hundreds more remained stranded in several cities, crowding termini, as train services were withdrawn.
These hapless people, who must largely fend for themselves, have been potentially exposed to the pathogen; some may have unwittingly infected others.
The week-long lockdown ahead cannot become a similar exercise in chaos, confusion and misery.
As a war-like moment in the country’s history, it calls for massive preparation with all hands on deck to mitigate the impact on people, and to formulate a public health response for the period beyond the shutdown.
ADDRESSING VULNERABLE CLASS:
Governments have a duty to ensure that the most vulnerable classes, economically and socially, including the elderly, have access to essential articles including medicines, close to where they live.
It should not be difficult to provide to them a package of staples to last a week using civil supplies departments, civic workers, and non-governmental organisations.
Considering that about 37% of households depend on casual labour as their major source of income for rural and urban India, and nearly 55% have tenuous regular employment, as per Periodic Labour Force Survey data for 2017-18, it is essential for governments to ensure that they get subsistence wages for as long as restrictions last.
Some States have already moved in that direction. Funds transfers during the containment phase of the pandemic, followed by a stimulus to sustain employment are necessary.
But a bigger challenge stares India in the face: can it get a universally accessible testing system in place to prevent transmission when the lockdown is lifted?
China, South Korea and Singapore, as WHO points out, adopted a strict shutdown, but used the breather to get a grip on infections by testing at the population level.
This is the hard work that lies ahead, and it will test the mettle of India’s national and State governments.
Governments must aid people during this difficult phase and prepare for wider testing
3) A pandemic, an economic blow and the big fix
India has just finished a day of curfew and clapping to practise ‘social distancing’ and to express gratitude to the millions of health and essential services workers amid the COVID-19 pandemic.
It was a laudable initiative by the Prime Minister to rally the nation together.
The nation is truly at war, as he alluded to, and it can be won only by everyone coming together in this ‘tragedy of the commons’.
But just two days before our clapping, the Indian-origin Finance Minister of the United Kingdom unveiled the U.K.’s biggest economic recovery package in its history, as an antidote to the crisis; there is no fixed cost to it.
The United States is finalising a trillion-dollar economic recovery package, while Germany is going ahead with ‘unlimited government financing’ for the disruptions due to the outbreak.
France, Spain, Italy and the Netherlands have all launched a half-a-trillion dollars combined in recovery measures.
If this reads like panic, consider this one data point — the number of people who lost their jobs, in just the last two weeks in America is the highest ever weekly job losses recorded in its history.
These large, developed economies are expected to not merely slow down, but to contract and experience negative growth.
The economic devastation will be much more painful and longer than the health impact.
While the rest of the world has sprung into action, India has merely announced the setting up of a task force under the Finance Minister to explore economic recovery options.
Contrary to rhetoric, neither will India be immune to this imminent economic crisis nor will some ‘preternatural force’ insulate us from this epidemic.
It is prudent to swing into action right away to soften the inevitable economic blow.
There are already reports that a third of all restaurants could shut down in the formal sector alone and shed more than 20 lakh jobs, in the coming months.
The entire automotive sector is shutting down its factories, putting at risk the incomes of a million people employed in this sector.
When people lose their jobs, entire families suffer, consumption drops and overall demand collapses.
When businesses close down, then they default on their commercial obligations down the chain and to their financiers.
This freezes up credit flow in the economy and halts production. Since this is a global crisis, it is not even possible for India to import and export its way to recovery.
Under such painful conditions, India needs a comprehensive recovery package that will first cushion the shock and then help the economy recover.
In my discussions with former Finance Minister P. Chidambaram and economists, there was near unanimity that the package should rest on four pillars:
providing a safety net for the affected; addressing disruptions in the real economy; unclogging the impending liquidity squeeze in the financial system, and incentivising the external sector of trade and commerce. So here is a broad plan for a ‘COVID-19 Economic Recovery Package for India’.
The destruction of jobs, incomes and consumption can be addressed through a direct cash transfer of â‚¹3,000 a month, for six months, to the 12 crore, bottom half of all Indian households.
This will cost nearly â‚¹2.2-lakh crore and reach 60 crore beneficiaries, covering agricultural labourers, farmers, daily wage earners, informal sector workers and others.
It is important that this is not just a one-month income boost but, instead, a sustained income stream for at least six months for the millions who have lost their incomes, to provide them a safety net and a sense of confidence.
The Pradhan Mantri Kisan Samman Nidhi (PM KISAN) programme with a budget of â‚¹75,000 crore can be subsumed into this programme.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) must be expanded and retooled into a public works programme, to build much-needed hospitals, clinics, rural roads and other infrastructure.
This can be achieved by integrating MGNREGA with the Pradhan Mantri Gram Sadak Yojana and the roads and bridges programme.
These three programmes together have a budget of nearly â‚¹1.5 lakh crore.
This must be doubled to â‚¹3 lakh crore and serve as a true ‘Right to Work’ scheme for every Indian who needs it.
In addition, the Food Corporation of India is overflowing with excess rice, wheat and unmilled paddy stocks — enough excess stock to provide 10kg rice and wheat to every Indian family, free of cost, through the Public Distribution System.
This combination, of a basic income of â‚¹3,000 a month, a right to work and food grains, will provide a secure safety net.
COVID-19 testing, treatment, medical equipment and supplies capacity can be expanded through the private sector and be reimbursed directly for patient care.
This will need a budget of â‚¹1.5- lakh crore for testing and treating at least 20 crore Indians through the private sector.
This will help create a large number of jobs in the private health-care sector, with trickle-down benefits.
STEPS FOR CENTRAL BANK:
The Reserve Bank of India (RBI) announced a â‚¹1.5-lakh crore liquidity and credit backstop facility on Monday, which is a very welcome move.
Further, the RBI should show regulatory forbearance and also set up a credit guarantee fund for distressed borrowers for credit rollover and deferred loan obligation.
The central bank must also immediately reduce interest rates drastically to spur business activity.
A two-year tax holiday and an appropriate incentive scheme must be designed for exports and service sectors that have been devastated (airlines, tourism, hospitality, entertainment, logistics, textiles, leather).
This could cost the exchequer between â‚¹1-lakh crore and â‚¹2-lakh crore.
FINDING THE MONEY:
In sum, the total incremental expenditure for the recovery package will be between â‚¹5-lakh crore to â‚¹6-lakh crore for FY2021.
The next obvious question is: Where is the money for this?
The â‚¹5-lakh crore to â‚¹6-lakh crore recovery package can be funded largely thorough three sources — reallocation of some of the budgeted capital expenditure, expenditure rationalisation, and the oil bonanza.
Given the extraordinary situation the world is facing, it is important to reprioritise our expenditure plan in the near term.
The government had budgeted more than â‚¹4-lakh crore in capital expenditure for FY2021. This will, unfortunately, have to be reworked and some part of it allocated to the COVID-19 recovery package.
For example, there is a budget of â‚¹40,000 crore for the revival of the telecom public sector units which can be delayed and the amount reallocated.
Similarly, the budget of nearly â‚¹1-lakh crore for national highways, roads and bridges can be rationalised to reallocate this to the recovery package. It is possible to extract a total of â‚¹1-lakh crore for the package out of the â‚¹4-lakhcrore budgeted capital expenditure for FY2021.
Fifty-four ministries in the Union government of India made a demand for grants and a total of â‚¹30-lakh crore has been budgeted as total expenditure for FY2021.
Of these, 13 large ministries account for as much of the Budget expenditure as the remaining 41 ministries combined.
There is ample scope to rationalise expenditure in these 41 ministries to extract â‚¹2-lakh crore for the recovery package.
The blessing in disguise for India is the dramatic fall in global crude oil prices —from $40 a barrel to an estimated $20 a barrel — which can help save nearly â‚¹2-lakh crore; this can be used to fund the recovery package or make up for shortfall of tax revenues.
To be sure, there will be a fiscal implication of this stimulus package and the fiscal deficit will rise driven both by increased expenditure and shortfall of revenues from the slowing economy. But now is not the time for fiscal conservatism.
It is often asked why the States cannot embark on an economic stimulus plan. The States combined incur an expenditure of â‚¹40 lakh crore.
There can be some sharing of expenditure of the recovery package of â‚¹1-2 lakh crore by the States. But after Goods and Services Tax (GST), States do not have the fiscal freedom to raise tax revenues on their own.
They are largely dependent on the Centre for their tax revenues through direct taxes and GST.
In summary, India needs an immediate relief package of â‚¹5-lakh crore to â‚¹6-lakh crore targeted across all sections of society and sectors of the economy.
Though daunting, the money for this can be found through detailed analysis and some bold thinking.
The global economy is headed for a dark phase and it is our duty to rise to the challenge to secure the future of all Indians.
It is time to think big, bold and radical to pull our economy out of this crisis.
This is India’s moment for the equivalent of the “New Deal” that U.S. President Franklin Roosevelt launched in America after the Great Depression of 1929