There is more to it than just fighting COVID-19

Updated: 27 April, 2020 08:15 IST | Dharmendra Jore | Mumbai

There are challenges galore as the fear of the pandemic intensifying further dogs Mumbai and other red zones, while the commercial sector demands effectiveness in lockdown exit

Pic/mid-day photographer
Pic/mid-day photographer

Dharmendra JoreAs the country simultaneously fights COVID-19 and a depleting economy, measures taken on both fronts are getting bouquets and brickbats. Coronavirus red zones (hotspots) have been increasing with every passing day and there are varied projections of growth in their numbers by May end. The national lockdown has now become a reason for people to get upset. Relaxations are not being implemented wherever they are supposed to roll the wheels of the economy.

Red tape, lack of coordination between agencies and departments, and the fear of relaxations boomeranging aren't allowing things to open. The major contributor to the fear of backfiring is the unruly social behaviour of the anxious population.

No doubt, in red zones like Mumbai, Pune and other containment zones in the country, priority should be given to save lives over encouraging exasperated economic activities.

Red zone worries
The projections from Mumbai are fearsome, even if we discard the Centres' figure of 6.5 lakh positive cases, and instead, consider the Brihanmumbai Municipal Corporation's (BMC) assessment of 70,000 by May 15. Civic officials countered the Centre throwing in all their brilliance in data analytics to sooth the distressed city. But it's time the BMC also responded to allegations that they reacted very late to making provisions of Central quarantine for those living in densely populated areas, such as slums, and others at home, and reporting fast to identify and quarantine infective clusters. Complaints keep coming in from the poor that they are not getting door-to-door supply of food and essential items. In a way, the Centre team deserves a 'thank you' note from the city because its projection, however, contentious, forced the city masters to think of getting ready for a rapid increase in intensive care units and hospital beds for the peak-infection period, which seems to have begun with the highest ever jump seen in the past three days. According to ICMR's calculation, the medical teams will need 150 ventilators, 300 ICU beds and 1,200-6,000 regular beds where the daily infection in an area is 500. Let's hope things fall in place and the BMC's projections don't overshoot much despite changed testing protocols and the lockdown.

Lockdown blues
It was being said that the lockdown will not eradicate the virus but reduce the cases by 25-40%. So if it is lifted, numbers of the affected will increase. An effective way, as many experts have suggested to control the pandemic, is creating a large number of quarantine places and door-to-door check-ups. It is good that Mumbai seems to have taken up some such measures as the peak time nears. Yet, the city might need more testing. We don't know whether it will happen because the BMC has changed its testing protocol.

Now let's see how lockdown will impact the economy. The PRS Legislative Research study says that the union government has estimated 73% of the Centre's revenue (or about R16 lakh crore) is expected to come through taxes. The lockdown will have an impact since most activities are suspended, and many of those which are permitted (such as agriculture, government services and essential services) have zero or lower-than-average taxes. Non-tax revenue may also be affected. A major chunk of capital receipts is budgeted from disinvestment of public sector enterprises (R2.1 lakh crore). The disinvestment process and consequently the disinvestment receipts could get affected if the equity markets remain volatile.

The state governments also face grim reality. As per their 2020-21 budget, on an average, nearly 70% of the states' revenue is estimated to come from taxes (45% from their own taxes and 25% from their share of centre's taxes). Lower collections in the Centre's taxes can impact the states' share. The GST compensation that comes from collections of a cess levied on certain goods, may be affected. With the sale of many goods likely to be affected this year, the cess collections may see a shortfall. The lockdown has severely impacted the consumption and sale of alcohol and petroleum products. This will affect the states' sales tax/ VAT and state excise.

'Correct exit plan'
What about the effectiveness of the exit from lockdown in specified zones and sectors? The Confederation of Indian Industry (CII) conducted a national survey last week and isn't very happy about it.

The findings on difficulties faced are glaring and need prompt attention. "The CII survey indicates that permits for enterprises, passes for workers and supply chain movement are the key hurdles for industries in exit from lockdown. CII has suggested that in non-containment zones, businesses should be allowed to function without requirement of permits and only through intimation to local authorities. Moreover, workers can be permitted to commute on the basis of a letter issued by the employer organisation, and travel by their own vehicles," said Chandrajit Banerjee, Director General, CII, in a statement.

The survey says a majority of respondents stated that guidelines issued by the Ministry of Home Affairs on April 15 and 16 on operational zones in rural and urban areas are clearly communicated by state governments. At least 57% agreed that they had clarity while 28% noted that partial information was available. Only 15% stated that incomplete or no communication was made available.

According to the survey, majority of firms are operating at less than 25% of full capacity, with just 10% having plant utilisation of over 50%. Only 1% of enterprises cited lack of capacity to implement health and safety protocols as impacting their restart and 16% said that their businesses are in the red zone, while 20% were located in municipal areas and could not operate. Clearly, the Centre and states have more at hand than only fighting the pandemic.

Dharmendra Jore is political editor, mid-day. He tweets @dharmendrajore Send your feedback to mailbag@mid-day.com

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First Published: 27 April, 2020 07:18 IST

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