Indian Express Editorial Analysis
19 May 2020

1) A lending hand-


Over the past few weeks, several state governments had urged the Centre to relax the fiscal deficit(difference between the total income of the government (total taxes and non-debt capital receipts) and its total expenditure) limits imposed on them on account of the stress in their finances.

On Sunday, the finance minister acceded(accepted) to their request, raising their borrowing limit to 5 per cent of GSDP, up from 3 per cent before.

(Gross State Domestic Product (GSDP) is defined as a measure, in monetary terms, of the volume of all goods and services produced within the boundaries of the State during a given period of time, accounted without duplication)



In itself, this is a welcome move. Allowing states to borrow an additional Rs 4.28 lakh crore this year will provide them the resources to fight this pandemic and perhaps, help them maintain their budgeted expenditure allocations.

But imposing conditions for availing these additional borrowings may not be the prudent(wise) approach in the current situation. As some states may not be able to carry out the reforms, making them ineligible to borrow more, they will be forced to cut back on their spending, imparting a contractionary fiscal impulse(urge) at a time when government spending is the only engine that can drive the economy.


As per the guidelines laid down by the Centre, the first tranche(part of total money) of additional borrowings amounting to 0.5 per cent of GSDP will be unconditional. However, the next 1 per cent of borrowing will be allowed in four tranches, linked to reforms in the areas of ease of doing business, one nation one ration card, power distribution, and urban local bodies.

States will be allowed to borrow the final tranche of additional 0.5 per cent of GDP only if they achieve the targets in three of the four reform areas. While states have the authority to borrow under Article 293 (1) of the Constitution, the central government exercises control through Article 293 (3) which requires state governments that are indebted to the Centre to seek its consent(approval) before borrowing.

Earlier, in its terms of reference to the 15th Finance Commission, the Centre had submitted to the Commission to take into account the conditions that the Centre may impose on states while providing consent under Article 293(3). While the Commission is yet to submit its final report, the Centre has used this opportunity to impose conditions on state borrowings.


State governments should be encouraged into undertaking contentious reforms, of course. But attaching conditions to their borrowings, especially at a time like this, is at best avoided. States, who are at the frontline of fighting this pandemic, need to be assured of adequate resources.

The conditions imposed on the additional borrowings should be eased, allowing them to borrow freely during this period. Allowing states to borrow more is welcome, but conditionalities imposed by the Centre should be eased.


2) Over to the states-


The guidelines for Lockdown 4, announced by the Union Ministry of Home Affairs on Sunday, continue a trend that began about two weeks ago. The ministry had allowed a range of economic activities in the non-COVID 19 hotspots during Lockdown 3. It has relaxed many more restrictions during the latest phase of the lockdown.

Significantly, the guidelines accede to a major demand made by the states during Lockdown 3 — they have been given considerable flexibility in setting the boundaries of the infection zones.

Such devolution of decision making is welcome. The states will now have to take care that they open up in a manner that does not aggravate(increase) the pandemic, while also addressing economic and humanitarian imperatives(needs).



The doubling rate of the coronavirus infection has improved to 13.6 per cent in the last three days, after a tough 15 days when it hovered(moved) around 11.5 per cent. The mortality(death) and recovery figures of COVID-19 patients have also shown positive trends, according to the Union Ministry of Health and Family Welfare.

However, these developments should not make state health authorities lose sight of the challenges they will face in the coming weeks. For example, according to a report in this newspaper, about two-thirds of the Shramik Special trains that ferry(transport) migrants back to their homes originate in COVID-19 hotspots. State authorities will have to make arrangements to test and, if need be, isolate the returning migrants in a dignified manner.

The resumption of inter-state buses could make their task of managing the pandemic tougher. At the same time, improvements in transport could ease the desperation of the working class — that has borne(suffered) a disproportionate burden of the country’s battle against the coronavirus — and check the already large toll(number) on India’s roads and highways. That is why state governments need to be open-minded in exercising their transport-related powers during Lockdown 4.


State governments had alleged that the earlier criteria of designating entire districts as infection zones circumscribed(restricted) their capacity to kickstart economic activities. The new guidelines allow them to designate “appropriate administrative units” — districts, municipal corporations, sub-divisions or wards — as containment zones.

This would require constant conversation between state governments and local bodies. Such interactions are not always cordial(kind) even during normal times, especially when the party holding office at the state is different from the one running the local body.

But the imperatives(needs) of combating the pandemic will require regular interactions between all levels of the government. Epidemiologists now say that the virus is here to stay. This means hotspots can change, the infection can recede(get back) from some areas and surge(increase) in other regions.


The new guidelines allow the states to deal with such eventualities. Their micro-management of the battle against COVID-19 will be watched. Devolution of powers to states to micro-manage the pandemic is welcome. They will need to work with local bodies.


3) Diplomatic Jijitsu at WHO-



As India takes a leadership position at the World Health Organisation this week, international attention is riveted(fixed) on the question of an inquiry into the origin of the coronavirus and the WHO’s response to it. The call for an international investigation was first voiced formally by the Australian prime minister, Scott Morrison.

Beijing’s reaction was visceral(relating to deep inward feelings rather than to the intellect). Despite the open threats of trade sanctions from China, Canberra has pressed ahead. It is working with the European Union to promote a resolution at this week’s World Health Assembly (WHA), which brings ministers from all the member states of the WHO.


The first multilateral discussion of the issues raised by the corona crisis at the United Nations Security Council and the G-20 forum in the last few weeks were preliminary and polite. Now the entire international community — the WHA has 194 members — has a voice in addressing the key issues raised by the corona crisis by debating the resolution.

Besides a scientific investigation into the origins of the virus, the resolution also calls for an “impartial, independent and comprehensive” evaluation into the international response to the corona pandemic. According to media reports on Monday, the resolution was close to gaining support from two-thirds of the WHA’s 194 members.

Australia and the EU hope to have the resolution approved unanimously(with no opposition). Since the resolution does not mention China by name, Canberra and Brussels hope Beijing will not oppose the resolution. They also hope to persuade(convince) Washington, which wanted tougher language including references to China, to endorse(support) the resolution.


Whatever the fate of the resolution, the wide-ranging support it has got amidst(among) the vocal Chinese opposition is impressive. To be sure, the resolution was watered down to get the maximum possible backing at the WHO. But it is said to have enough teeth(support) to dig deep into the issues raised by the corona crisis.

A few weeks ago, it seemed China and the Director General of WHO, Tedros Adhanom Ghebreyesus, had full control over the corona narrative on the issues involved. The Trump administration’s aggressive questioning of China’s role in spreading the virus and its accusation that the WHO DG was complicit(being involved in) in keeping the world in the dark had not gone down well. Nor did the US threat to cut off funding for the WHO.

Within the US itself, opposition Democrats and the foreign policy establishment has attacked Trump for trying to “divert attention” away from his failures by scapegoating(victimising) China and the WHO. China’s success in quickly getting things under control at home and its expansive mask diplomacy seemed to give Beijing an upper hand at the WHO.

China’s growing clout in the developing world and bilateral economic levers against major developed countries, including in Europe, appeared to insure against any serious international questioning of its handling of the virus.


If the public pressure from the US concentrated minds at the WHO, some quiet diplomacy by middle powers, including India, appears to have created the political basis for learning the right lessons from the pandemic and preventing similar eruptions in the future.

Some observers see a unanimous approval of the resolution as a diplomatic setback for Beijing, since limiting the demands for an external inquiry has been a major political priority for Beijing. There are similar demands at home for an investigation into a crisis that led to an enormous loss of life in China and punishing those responsible. The leadership in Beijing is not comfortable with these demands.



Beyond the immediate debates, Delhi must look at the deeper issues that have hobbled(restrict the activity or development of) the WHO. First is the need to develop new international norms that will increase the obligations of states and the powers of the WHO in facilitating early detection and notification of pandemics. This will involve finding ways to bridge the contested notions of state sovereignty and collective security.

Second is the question of funding. If you have a club that depends on donations rather than membership fees, donors will inevitably(unavoidingly) set the agenda. Over the decades, the WHO has become ever more reliant on voluntary contributions from governments and corporations rather than assessed contributions from the member states. This is going to leave the WHO rather vulnerable to pressures.

Third, India must also ask if the WHO is trying to do too many things. The WHO’s initial successes came when it focused on a few objectives like combatting malaria and the elimination of smallpox. A limited agenda might also make the WHO a more effective organisation.

For Delhi, the widespread support for the resolution is a vindication of its early call for transparency and accountability in the responses of China and the WHO to the pandemic. But India knows it is one thing to pass to a resolution and entirely another to compel a great power like China to comply.


Any current effort to understand the origin and spread of the COVID-19 virus and a long-term strategy to deal with future pandemics must necessarily involve more than a measure of Chinese cooperation. S

ustained engagement with Beijing, then, is as important for Delhi as deeper cooperation with Washington and the “Quad plus” nations(The seven countries — India, US, Australia, Japan, South South Korea, New Zealand and Vietnam) as well as more intensive engagement with the non-aligned nations in promoting a new global regime on preventing and managing pandemics.