Whenever the Prime Minister (PM) addresses the nation at 8 pm, it is anticipated with great trepidation. Twice, it triggered enormous panic. On 8th November 2016, when he announced the debilitating demonetisation of currency, and again on 24 March 2020, when he put the country into a drastic 21-day lockdown to beat the coronavirus.
In both instances, the decision had great public support. People supported demonetisation in the mistaken belief that it would wipe out black money; instead it dealt a blow to economic growth that we are still to recover from. This time too, the nation is willing to stand with the PM in this tough action.
Unfortunately, like in demonetisation, this time too, it is the poorest people—migrant labour, daily wage workers and small and the self-employed that are bearing the brunt of the decision announced, without adequate preparation or attention to detail.
On 24th March, the PM announced a paltry Rs15,000 crore
allocation to strengthen India’s health infrastructure to deal with Covid-19. This was a day after Rs20,000 crore
was allocated for a wasteful revamp of New Delhi’s majestic central vista), It was only on 26th March that finance minister (FM) has announced
a more comprehensive, Rs 1.7 lakh crore relief package that included medical workers and weaker sections of society. For all others, the relief so far, is mainly in terms of additional time for filing returns and a reduction in penalties for late filing of certain tax deductions.
It is already evident that this is not going to be enough. The initial package doesn’t cover all those who are affected, especially the massive disruption of small businesses whose revival is crucial to restart economic growth. The FM’s announcements so far have been mainly for those who have Jan-Dhan accounts, or are existing beneficiaries of some state schemes. We know for a fact that these do not cover all Indians and there are plenty of glitches in the delivery process.
A lot more needs to be done for small entrepreneurs, self-employed professionals and others who are going to have a harrowing time paying equated monthly instalments (EMIs) on home loans and other borrowings. They need forbearance and time to make payments without affecting their credit scores. No announcements have been made in this regard. (This column was written before the RBI announcements on 27th March)
It is extraordinary for the PM to exhort employers to pay salaries, without any concessions to smaller employers whose businesses have been shut down or disrupted for over a month.
Poor Planning + Police Violence
The pandemic needs to be tackled with far greater planning, empathy and deeper connect with people, who are fighting to come to terms with an unforeseen calamity. Instead we have the opposite. There are heart-rending images from across India of the police resorting to indiscriminate violence and humiliating people.
Employees who are clearly exempted under the lockdown notification, including doctors and bankers have been harassed and beaten on their way to work. A man out to buy milk in Bengal reportedly died
due to the police beating.
They stoppage of notified essential commodities being sold, disrupted supply chains of essential commodities by beating up of employees and brought even large, organised delivery networks to a halt
. While this was happening, twitter handles of several bureaucrats and the police were confidently assuring people of doorstep delivery. Large e-tailers, such as Amazon, BigBasket, Grofers and others, had not restarted operations on Thursday, mainly because outstation workers have left in large numbers and cannot return. Getting them back during the lockdown will remain a challenge, even while these distributors have plenty of supplies at their suburban distribution hubs. The worry is what happens in a couple of weeks when existing stock begins to dry up?
In Delhi, the police were seen destroying carts carrying fresh vegetables, instead of getting them organised to maintain social distancing.
The worst affected were migrant workers. Overnight, several lakh people had lost their jobs and their fragile resources. The sealing of state borders, stoppage of trains and buses has left them homeless and without resources; most of them are sole bread-earners for families living in the poorest villages of India.
While well-to-do Indians stranded abroad have had special planes sent for their rescue (and many of them have also transmitted Covid-19 by being irresponsible about quarantine rules), there have been no arrangements to take migrant workers back to Orissa, Bihar, Uttar Pradesh and Bengal.
There are troubling stories from across India about police brutality unleashed on hapless persons trying to find their way back to their homes across state borders.
To make the lockdown work, the state needs to do two things: rein in the police and involve the NGOs in the outreach, by drawing upon funds available for Corporate Social Responsibility (CSR).
Involve the NGOs
The government cannot handle a calamity of this magnitude on its own. It will require support and cooperation from all quarters. This has to be facilitated through dialogue rather than a top-down orders or obdurate bureaucracy.
In fact, the government will have to work with non government organisations (NGOs) who have feet-on-the ground. At a time when the government is yet set up the economic task force to deal with Covid-19, announced by the PM, several NGOS have already sprung into action to help the distressed. Consider just one example. FM Nirmala Sitharaman announced relief measures on 26th March, which will kick-in only from 1st April, but organisations such as YUVA (Youth for Unity and Voluntary Action) and others have been out distributing sustenance packets of uncooked rations to the distressed for three days already.
Hunger is an immediate issue for the poor, especially for those with small children or older parents to look after. They cannot possibly wait for 1st April.
Ironically, NGOs and charitable trusts have been the focus of extraordinarily tough regulation, increased red-tape, re-registration requirements and punitive action in the past few years, and especially under the finance bill cleared by parliament in the midst of the Covid-19 pandemic.
The government has to realise that it needs these very NGOs and trusts to reach help and relief to the poorest Indians, if a well-intentioned lockdown to contain a pandemic is not to lead to bigger humanitarian issues including starvation etc.
Change the CSR rules
The government has done well to permit
companies to use mandatory CSR (corporate social responsibility) funds to fight COVID-19. But a lot more needs to be done. Noshir Dadrawala, head of the Centre for Advancement of Philanthropy says that there is a “bigger need to relax existing rules and guidelines to enable companies to contributing their own products (particularly medicines, medical equipment, essential supplies, protective gear, hygiene products like soaps, hand-wash and hand-sanitizers and medicine).”
Yes, current rules forbid a Hindustan Lever from dispensing free soap or sanitisers under CSR. Or pharma companies to distribute medicine, gloves or protective gear under CSR, even if they are capable of re-packaging it in bulk for quick supplies without worrying about costs.
While the rules may have been intended to prevent companies passing off a portion of their sales as charity, it has a negative impact on giving. The need for such draconian conditions is illogical, as is ‘mandatory CSR’ forced on corporates, not only without tax benefits but with elaborate reporting requirements.
Instead of optimising charity, forcing companies to do charity in unrelated areas has only increased cost of intermediation and is creating self-important bureaucrats in corporate India to dole out funds without a real connect. It has sadly reduced the genuine NGOs, who are engaged in actual out reach to the distressed and disadvantaged into becoming ‘implementing agencies’ who have to look up to corporate executives for funding and largesse. Mandatory CSR had also dried up a lot of informal lending to such small NGOs, because they are unable to comply with the bureaucratic documentation, proposals and reporting requirements that are taking up more and more time and resources away from real work. It is time to suspend this nonsense, at least until we have beaten the pandemic.
So huge is this crisis that the government needs to facilitate everybody who wishes to contribute to the revival effort NGOs engaged in consumer welfare or education do not have COVID related activities as part of their stated mandate, but they must be encouraged to go beyond their trust deeds or articles of association and engage in relief work for the next six to eight months (without fear of harassment later) when their regular activities have come to a halt due to the lockdown.
A responsive government that will focus on action rather than elaborate media briefings, punctuated with self-praise, is what needed today. Ordinary people are doing a lot without fanfare or expectation; it is time the government shows the humility to empower them.