The Mint: Good day, Smita and thank you very much for making some time to talk to the Mint.
Smita: I’m delighted to be here.
The Mint: I would like you to start off by talking about what the world looks like from where you’re sitting in India in the context of the issue that’s affecting all of us around the world -the pandemic. Maybe you could give us a bit of a feel for how you think things are going in India?
Smita: As most of you are aware, the numbers have been on the rise. We expect that to be the case. People are talking about the peak coming in anywhere between the end of June and the middle of July.
One of the most interesting features is the huge unevenness in how COVID-19 has affected India. And it that would be very nice to discuss some of the lessons to be learned from some of the States in India that may be of interest to other parts of the world.
The Mint: The fact that the peak is still to be reached, is that because it was later in starting or would you say that globally it has been worse in India than many other places?
Smita: It’s a little difficult to say. One of the things that is clearly happening is that you will see a slightly uneven progression across Indian States. However, most Indian States actually began the process relatively early. We had quite a lot of warnings, and I’ll put this in UK context as well, because I was traveling to the UK around March the 10th and I came back to India on March 14th and had experienced what I thought was quite an alarming situation underway in the UK.
By the time I had traveled, to just put this in context, we had already, at least in the state of Karnataka, been hearing about a month’s worth of messaging. Every time we picked up a phone, we listened to a message telling us that we needed to cover up, wash hands, watch for these symptoms, and be very careful.
The Mint: Suggesting therefore that you think you were or at least your state was ahead of the game in terms of taking action compared to the UK.
Smita: That’s right. It is only in retrospect that one understands what the bureaucrats are doing. On the one hand, clearly there had been quite a lot of attention both from politicians as well as bureaucrats, from health policy on the ground to understanding what they would need to do, the anticipation of COVID-19 hospitals, patient tracing, anticipating a possible lockdown, what to do with international flights etc.. I think everybody was looking to China as well as to Western Europe and trying to understand what to prevent and what to learn from.
The Mint: And, of course, in India there are a number of states and so presumably the performance and the approach was different in different states. Is it the States who are the main actors or is it the federal level?
Smita: So, India is of the federal system and that means some of these subjects, especially health, are handled at the level of the States. Obviously, there are systems of fiscal transfers to states. The public finance architecture of the Indian type of federalism is relatively well established. Therefore, some of the arguments politically revolve around whether the center in Indian States have been doing what they need to do as efficiently as they ought to.
But what has really got hidden in the debate is how differently Indian States have responded. Why that’s important is that most Indian States are the size of Western European countries. So it does become quite interesting to understand what is going on, why it is so uneven and what lessons we might take away. Because everything tends to get bundled under the word ‘India’, unfortunately a lot of interesting aspects aren’t discussed.
The Mint: So what would you say is one of the things that really struck you about the different approach by various States and the success or lack of success that they’ve had?
Smita: A lot of this is discussed almost exclusively in terms of party politics. One of the things that is exciting about economics, in terms of a pluralistic agenda, is that we can source from other perspectives and other disciplines.
The psephologists and those who are really focused on electoral politics have also missed some of the interesting stuff. That’s because they’re focused very much on party politics. Actually the real scenario is quite intriguing because it cuts across the ruling party of each State, and the economic constitution of states,in terms of which ones have been able to deal with everything from migrants to food logistics. In my own state, Karnataka, which is, in terms of size, roughly between Italy and the UK, one of the things that is really fascinating is that it is India’s big economic engine.
It has the highest concentration of tech, and lots of science and engineering institutes as well as a very large high-skilled migrant population. It’s sort of a different country and maybe because of that, one of the things that is quite interesting is, how they’ve dealt with it.
Some of the features are quite clear. Bengaluru is about the size of London and it has a very small number of cases. The state has done relatively decent testing by Indian standards, although still very low by global standards.
Approximately between 85% to 90% are asymptomatic, from the minimal testing coming in. And yet the state has dealt with it surprisingly well. Patient tracing has been exceptional, the contact tracing – massive with huge efforts by the police and the health authorities to trace international travelers.
I experienced it firsthand myself as I was coming back in from the UK and it has got stricter and stricter ever since. We’ll see how it goes when things begin to open up.
The Mint: And it seems to follow a pattern that the most successful areas have been the ones who keep the cat in the bag if you like, or, act quickly, trace and keep the numbers very low, but it seems that once the numbers get really high and get away from you, then it becomes very difficult to keep a handle on tracking, tracing and so forth.
So it must’ve moved fast. Was it also lucky that it didn’t have a lot of cases to start with?
Smita: From an economic standpoint, these are obviously all difficult decisions. Even if you listened to the health experts, even if you listen to the folks dealing with logistics, obviously there are some hard choices here.
In a two week period, just about the time I returned from the UK, the police and the health authorities in the state of Karnataka, in Bangalore and in particular in Bangalore city, which is roughly about the size of London, contact traced approximately 44,000 international travelers.
Bangalore is a big tech hub, and everyone’s traveling. Yet, they traced them by following up with them twice a day, checking in by phone, phone surveys and a phone call and it got more stringent (from what I understand) after, because of course, then I went into self-isolation for two weeks and, I had a stamp put on my hand that said, proud to protect Banglore. But one of the things that is interesting about it is that clearly the economic decisions are complex. You have to shut down your airports and you have to deal with all kinds of job losses.
The Mint: There’s the decisions then there’s the implementation, and you said yourself, that it was surprisingly well done and I suppose there’s an impression that bureaucracy in India is not always efficient and effective. Why do you think they were surprisingly effective in this case?
Smita: I think that’s a good question.
It was surprisingly effective because so many things had to be done. And we are looking across the globe and we’re seeing that, governments both national and subnational, if they’re large enough, have so many decisions on their table to address.
The Mint: Yeah.
Smita: In India, the bureaucracy is quite well established.
You know, we have both an administrative service at the national level and state level groups. You have the police which are handled at the level of the state. Then you have health workers. And what was surprising was not so much that this was the situation in some of the big cities. What is surprising is that at the level of districts and villages, there has been quite a lot of positive information coming in about how groups have handled it.
So I do think that one of the things that’s quite compelling is to try and understand how big a deal COVID-19 actually is, because one problem that India has which a lot of Western Europe doesn’t have is all the co-circulating diseases that need attention.
The Mint: Right.
Smita: Dengue, and all the rest.
The Mint: Yeah. Just before we get on to that – a practical matter obviously is social distancing. And one of the things one might think is that India, with its very high density population would find social distancing more challenging. And, obviously in the UK, for people with larger houses, and nice gardens, it’s all much easier. If you’re squashed into smaller accommodation, then it’s much more difficult. How has that played out?
Smita: An urbanist would probably say that it depends on the city. I think one of the reasons Mumbai has had so much difficulty is obviously because of the level of density in both rich and poor areas. Presumably the same is true of parts of New York City – density isn’t your friend when you’re dealing with this kind of situation.
The Mint: So the areas of India and the States with more dense population are generally doing worse – is that a pattern or is it more complicated than that?
Smita: The situation is more complicated. Bengaluru, by and large, is less dense. Depending on how you think of it relative to Mumbai, there’s no question, but you could argue that in Maharashtra itself, which is the worst hit Indian state, the city of Mumbai and the city of Pune (which are dramatically different in terms of density overall) have both been affected, and some of that has had to do with how transport, and so on, has been dealt with between the cities of the same state. So your point about how one deals with things early and how much, perhaps politicians, handover charge or listen to experts or consider their administrative apparatus and handover a certain level of control, these do matter.
The Mint: So how is that playing out in Mumbai? Were they late in making decisions and they got out of control? And what were the factors that led to that?
Smita: This is all relative. This is the challenge. Remember that, as of today, India has still just about under the total number of cases that Italy has had.
So that’s still quite low globally. In terms of mortality rates, and in terms of number of deaths, India is incredibly low, so we have to maybe ask a different set of questions. Should we be even comparing these cities across countries, or the States across countries? And I think, for economists this is both the question no one wants to ask, but also the question that’s quite hard to answer, bu if you don’t contrast, you lose a tremendous opportunity to learn from each other. On the other hand, it’s not clear with over 80% or 90% asymptomatic in some of the cities in India, even with low testing, what does that really tell us?
It either tells us amongst other things that perhaps, Indians aren’t going to respond in quite the same way to COVID as in the UK or in Spain. And why is that? I don’t think biologists have the answer.
The Mint: That’s interesting, because here in the UK, the black and minority ethnic (BAME) population has been much harder hit. Now obviously that’s lumping together people with very different genetic heritages. But that is interesting. If you have this patchwork of results in different States, do you think it’s either (and this is happening at the moment) that States will control the movement of people within India between States to avoid the States where it was large prevalence from spreading infection, and increasing infection in the States that have low prevalence? And how did that affect that?
Smita: To return to the previous point, however, because it is actually something that affects this question as well. I don’t think this is about genetics. This is also about how many co-circulating diseases we see every year around this time. And people have commented about relatively low rates in terms of morbidity or mortality or recovery even in previous SARS-type infections. So this may be something that really is a combination of geography as well as economic response.
The Mint: Just following up on that then – do you think that because Indians are more affected by a greater set of disease that they may have a tougher immune system?
Smita: That’s a question for a biologist. This is certainly the season for a huge number of theories as well as diseases.
The Mint: Okay. Then going back to this issue of the different States and different situations and control over movement between States.
Smita: States in India, especially those that are receiving States like Karnataka is, has a huge number of migrants coming in, and have a lot of autonomy about what they do.
And the current ‘Unlock 1.0’, which is really lockdown 5.0 in India, is a period where a lot more latitude rests with States to decide what to do. They had that latitude, and they’ve chosen to use it quite differently. A state like Kerala, which is a mostly a migrant outward state both within India and outside the country, will have a different set of choices facing them relative to a state like Karnataka. Of course, that will depend on which industries that state has, and what kind both the structural and institutional profile of that state is. To give you an example, States that have very high construction activity tend to be States that also see a lot of people moving between states (because construction tends to be quite seasonal this time of year for agriculture) .
The Mint: Right. And is it quite difficult to control movement between States anyway?
Smita: Absolutely. In a democracy where it’d be incredibly hard both to advise people to stay or advise people to go, people are free to move (as they should be), and if they decide that this is a time of great uncertainty and the state which they have considered home for work purposes is not particularly friendly or not helping them in a time of need, frankly, it’s very understandable that they will choose to move and go back home.
It depends a lot on the industry and this is another area that economists should look at a little bit more systematically because we see very mixed data from across states. Many migrant workers are in relatively good, and quite assured professions in places where they can live and work. Many of them work six to a room will not be able to stay.
The Mint: So people will decide whether to move depending on (a) whether there’s work, and (b) whether the support provided, and in the UK, there’s quite extensive support for people unable to work due to COVID 19 furlough, employers are paying 80%. What sort of support systems are there in India if you are unable to work and how does that vary between states?
Smita: That’s really a question of what kind of worker you are. If you are a casual day labor, chances are you are in a very, very bad situation because you have no employer system to fall back on.For those who work in what would traditionally be called the formal economy, it would look similar to that in many other parts of the world. You would have some kind of system whereby even if you were fired, you would have a social protection.
The Mint: By the state or provided by state, or by federal levels?
Smita: If you had worked for a large company in India you would be just fine unless you were fired, in which case, depending on the company and depending on the sector, you would have certain kinds of benefits that is not true, by and large, for the bulk of Indians and most Indians live and work in quite insecure conditions. Which is one of the reasons why it has been quite difficult to compare across countries, because what countries do in a situation like this depends on both the citizens and the residents of that country as well as the governments.
The Mint: Movements of these people within insecure employment back to their home states – I know some of them are still traveling at this point.
Smita: Absolutely. Absolutely. Yeah.
The Mint: So how is that playing out?
Smita: I think some of the more dramatic stories get told. Unfortunately that’s true all across the world. Stories of great bravery and courage such as young girls cycling to get back home, which is really heartrending is very understandable. I think the vast number of workers across the country will have to make difficult choices. Many of them have been in places for a long time or go back and forth. For many of them, they will have difficult choices depending on whether the host state is opening up, and the sector that they work in. In the hotel industry, for instance, many States are opening up now. So was it wise for them to go? I think that can only be evaluated in terms of what decisions they have to take at the time.
The Mint: Presumably there are quite substantial risks of hunger and starvation if people move and then go back to places where there’s actually no work usually left for them in the first place because it was difficult to earn a living.
Smita: For States across India, they’ve had to make some very difficult decisions. Some of them have been very slow to signal to a migrant population the timeline that it might take or the kind of the time it might take for them to open up the economy again. Some of that is because both politicians and bureaucrats weren’t quite sure how long it would take.
In some cases, they’ve been a little bit more systematic asking them to please stay, because even if it takes a while, they’d feed and house them. In some cases, you would have a situation where people have left and then try to return – that’s still happening. So it’s not easy. At TCLab, for example, we have a new program where we’re looking at the relationship between food and health systems precisely to try and look at this. You can’t deal with a health surge in your hospital systems unless you deal with lockdown. You can’t deal with lockdown until you deal with food logistics. And in a way you can’t deal with food logistics unless you have a backdrop of dealing very systematically with health again. So these things really could evolve. And for people who are thinking theoretically as well as from a methods standpoint, it’s particularly important to consider what the data looks like on the ground and what organizations are reporting.
The Mint: I just wanted you lastly to talk about the sort of future outlook for the Indian economy in terms of major elements because presumably there is going to be deep recessions, around the world. We see the US economy, in a particular, in a bad state with still increasing levels of infection, and now, substantial civil unrest, which is also presumably going to lead to increasing spread of infection. How is India and the emerging world going to cope with that?
Smita: For a country like India, while the central government of course plays a critical role, there’s going to be a huge pressure on state governments to also get their act together.
And that’s as it should be since it’s a vibrant democracy, as you know. It’s a very noisy democracy. It’s the kind of place where States really do have to step up and figure out what it is they want to do. It’s at an interesting time in terms of political economy. A lot of state government chief ministers have national aspirations, and if they do, then this is the time to show what they could do.
Certain sectors, which everyone across the world knows have been hard hit, such as tourism, and the food business – all of that isn’t going to open up anytime soon. So while there may be slow demand building out, I think the real problems will be figuring out what to do with manufacturing.
As we’re speaking, there’s been Chinese incursions into Indian territory. We have a standoff of some kind at the border. There are also issues with India taking over the presidency, the executive board of the WHO – so these are exciting times for the country.
The Mint: Exciting and scary, but just coming back – one of the things here is of course, between a sort of austerity approach, which we’ve seen in the past, to depressions or recessions. And an approach that actually looks for stimulating something like a green recovery presumably – is that debate live in India? And would that have to be at the federal level? Who would be able to provide the stimulus if there was to be one? And is there any sign that might happen?
Smita: So India’s gone through many stimulus announcements over the last month and a half. Some of them have been of quite large scale. There’s been quite a lot of debate about how large it is in practice. It is from the central government and from the central banks. I don’t see too much more signaling that could be done that the corporate sector hasn’t already heard. I think they’ve heard it loud and clear. Much of that has been tied up. One of the things that will be very interesting is to understand how the ‘Make in India’ kind of self-reliance program, which could be seen as a kind of new ramped up, import substitution policy or self-reliance strategy will play out going forward across the States.
This will be partly because many manufacturing as well as service sectors will depend on this. It’s very closely tied to science and tech innovation in India. I think that’s quite promising. Some will argue it’s too big, too broad, with not enough specifics. I think you’re seeing some state governments linking it very strategically with migrant returns as well as in industry and investment to try and do something a little bit different. Such as to map profiles of skilled workers with the new version of the ‘Make in India’ on the green issue.
It is leading the world in many respects on solar and wind investment. I don’t think it can do a whole lot more. There’s still a certain amount of divestment in coal that needs to happen but it’s, by and large, already very green on that end. But in biodiversity and in pollution, I think it can do a lot better.
The Mint: Brilliant. Thank you very much, Smita, for that. We’re obviously trying to deal with a hugely complex topic in a relatively short time so it’s quite challenging, but I hope we’ll be able to return and particularly cover more about the data on health and the implications. That’s another occasion for the next issue.
Smita: It sounds good. It’s been a pleasure. Thank you.
