Prem Shankar Jha

Modi did not want only to prevent a second wave; he wanted all the credit for stopping COVID-19 in its tracks to go to him and him alone.

Modi's Gamble, and How Many Lives It Will Cost
Illustration: Pariplab Chakraborty

In her heart-rending description of her desperate search for oxygen to save her father’s life, the celebrated TV news anchor Barkha Dutt ascribed his death to three features of governance that have defined Modi’s India: complacency, callousness and incompetence. She could have added a fourth – an insatiable, almost suicidal appetite for risk born of a compulsion to keep reinforcing an already swollen image of himself.

Prime Minister Narendra Modi has displayed this penchant half a dozen times in the last seven years: his personal announcement of  demonetisation before the new currency notes had even been printed; his imposition of the Goods and Services Tax with immediate effect, denying India’s 71 million small manufacturers time to set up the required accounting systems; his sudden  confrontation of the Chinese at Doklam in Bhutan without consulting Thimpu, and his equally sudden removal of price and marketing protection from farmers without even a rudimentary examination of how it would affect them.

His appetite for risk surfaced yet again, within days of being told that the first wave of India’s COVID-19 epidemic had peaked in September last year. Of the 50 lakh Indians who had been infected until then, 81% had recovered. Some 10 lakh patients remained under medical care, most of them at home. A little over 84,000 people had died. The mortality rate of 1.68 % was about the lowest in the world and the envy of other nations (notwithstanding fatality undercounting and underreporting).

But everyone involved in the actual fight until then knew that it was too good to last. Scientists always knew of the danger that the ‘original’ virus could mutate into more dangerous forms. Second ‘waves’ of COVID-19 had already developed in the summer and autumn of 2020, spreading through parts of Belgium, Iran, South Korea, Germany, the Czech Republic, Spain and the US.

When researchers in the UK reported the B.1.1.7 variant in December 2020, the country’s government immediately extended its existing lockdown. The variant was found to be more infectious but no more dangerous than the original. Within weeks, scientists reported two more ‘variants of concern’, from Brazil (P.1) and South Africa (B.1.351), in addition to numerous other strains and mutations. P.1 and B.1.351 have been found to be able to partially evade the human immune system, endangering prospects of vaccines being developed at the time.

Therefore, every government took the risk of a second outbreak seriously from the start. By early January 2021, the B.1.1.7 strain had been detected in samples in Denmark, the Netherlands, Australia, Italy, Sweden, France, Spain, Switzerland, Germany, Canada, Japan, Lebanon and Singapore. All of these countries took quick precautions, imposed lockdowns and/or stepped up their vaccination schedules.

There were only three exceptions – all in large democracies with insecure but ruthless leaders in power: Brazil, the US and India.

India’s scientific and medical establishment, and its health minister Harsh Vardhan in particular, were fully aware of the threat that later strains of the virus could pose. Vardhan had overseen the last phase of the polio eradication campaign during Prime minister Atal Behari Vajpayee’s tenure, so he had an experience of disease control that no one else in the government did.

But from the very first days of the pandemic, the Modi government developed two conflicting aims. While the administration wanted to chart a course of action that would minimise the risk of a second wave, the political establishment – headed by Modi himself – was concerned only with extracting every ounce of political advantage from the crisis.

The conflict emerged in the very first week of the March 2020 lockdown. In speech after televised speech, Modi reminded his audiences that just as the Pandava had won the battle of Kurukshetra in 18 days, he would win the battle against COVID-19 in 21 days. He thus turned the lockdown into a personal battle between him and the virus.

As the days passed, and the number of new cases increased instead of declining, Modi began to look for something, or someone, to blame. Conveniently for him, the Tablighi Jamaat conference in New Delhi gave him just the scapegoats he needed – foreign religious clerics belonging to a religion he detested and had targeted to attain power. The strictest possible lockdown was therefore imposed on the entire Nizamuddin area of New Delhi and criminal cases filed against the organisers – despite the fact that the conference had ended two days before the government imposed the first travel restrictions on foreigners, on March 14.

But new cases continued to mount long after the event’s conclusion, so Modi sought help from the occult. To invoke the gods to come to his aid, he asked  people to turn off their lights and beat thalis at preordained times and used the Air Force to shower flowers over Delhi.

While he was monopolising TV time, his administration was setting up 11 empowered groups under the National Disaster Management Act, to deal with the material aspects of the forthcoming challenge. One of them, within days of being set up, warned the government in unambiguous terms that a second wave was likely and provided detailed recommendations on how to prepare for it, should it happen.

Among its most important recommendations was that India immediately import 60,000 tonnes of oxygen and upgrade 150 district hospitals – mainly by supplying them with 162 pressure swing adsorption plants to isolate oxygen.

The 162 plants were expected to cost Rs 200 crore. At the time the empowered group made these recommendations, the PM Cares fund, which Modi had set up to fight the pandemic, had already received Rs 3,076 crore, mostly from public sector companies. So Modi had the money he needed, in abundance.

A COVID-19 patient on oxygen support waits to be admitted at Patna Medical College and Hospital, during the second wave of coronavirus in Patna, Friday, May 14, 2021. Photo: PTI

But Modi did not want only to prevent a second wave; he wanted all the credit for stopping COVID-19 in its tracks to go to him and him alone. So when the  first wave peaked in September 2020, his propagandists immediately  proclaimed that Modi’s harsh lockdown had defeated the outbreak and saved India. From then on, it was business as usual for Modi, and business as usual had  only one goal: to wrest West Bengal from Mamata Bannerjee and the Trinamool Congress, no matter the cost.

In Modi’s highly centralised, PMO-centred decision-making process, this shift of attention sowed the seeds of today’s disaster. The government’s first act was to wind up five of the 11 empowered groups and discontinued the meetings of the group tracking the virus’s spread. The programme to upgrade district hospitals went into limbo – as did the plan to create an oxygen reserve by  importing 50,000 tonnes of oxygen.

Genome sequencing, which is essential to determine which mutations are spreading in which population, took the back seat. It was not till December 25, 2020, after B.1.1.7 had already arrived in India, that the health ministry created the Indian SARS-CoV-2 Consortium on Genomics (INSACOG) – a chain of 10 laboratories to sequence and analyse virus samples.

By March 24 INSACOG had tested 10,787 samples and found 771 instances involving three of the eight ‘variants of concern’ the US Centres of Disease Control had identified. Of them, 94% were of B.1.1.7.

This should have set the alarm bells ringing in every office in the PMO – but four state elections were imminent and Modi could think of nothing else but the stentorian speeches he was preparing to give in the 23 election rallies he intended to address in West Bengal and Assam.

In fact, the absence of any sense of urgency in the government after September was so complete that it took eight months, until November 2020, just to invite tenders for the oxygen plants. As a result, on April 18, 2021, only 11 of the 162 oxygen plants had been installed.

Also, none of these had been funded by the PM Cares fund. In fact, it was not till April 15 that the PMO coughed up a measly Rs 100 crores from its corpus to complete the construction of 59 more plants and bring the number up to 80 by the end of May.

There was a similar departure from responsibility  in the vaccination programme. From January 16, the government concentrated on vaccinating frontline and healthcare workers. Vaccination for those above 50 years began on March 1, but with that private interests and preferences came roaring back into play.

Pfizer was refused permission to sell their vaccines in India. The Centre also failed to strike advance purchase agreements with vaccine-makers and grossly underestimated Indian manufacturers to satisfy the domestic demand for doses.

The government also forced Covaxin, an ‘indigenously developed’ vaccine, on government hospitals before the latter had completed its crucial phase 3 trials. As a result, vast numbers of eligible persons refused to take the vaccine, slowing immunisation still further.

Despite this rampant irresponsibility,  Modi’s luck held for five months after September. Through these winter months, the number of active cases continued to ebb. When it reached a minimum in the week of February 11, 2021, there were fewer than 138,000 patients under treatment and a hundred or so deaths a day. The country heaved a sigh of relief. Markets, restaurants and malls began to function again and life was returning to a semblance of normal. But by then, the seeds of the second wave that is now ravaging the country had been sown.

The second wave

The first warning came, almost unnoticed, in late-February when the number of new cases daily began once again to exceed  recoveries, causing the number of active cases to start rising.  This was slow at the beginning: the first doubling of active cases, from 137,000 on February 14 to 273,000 cases on March 18, took   32 days. But after that, and within six days of INSACOG’s warning, the speed tripled and each doubling took only 11 days or so.

The number of active cases breached the 1 million mark on April 10 and the 2 million mark on April 21. Not until then did it register on Modi that there was something more important happening in the country than the West Bengal and Assam elections. But by then he had already addressed 10 million persons in  23 rallies, where neither he nor anyone in his audiences wore a mask.

Modi’s utter disregard for the consequences of his actions emboldened lesser leaders in his party to follow his lead. The chief minister of Uttarakhand not only refused to cancel the Kumbh Mela but put out advertisements to draw more devotees from around India.

When a special leave petition to the Supreme Court pointed out on April 16 that “there is no protocol in place to ensure that devotees who get infected do not go on to spread the virus when they return”, he retorted that “nobody will be stopped (from attending the mela). We are sure that faith in God will overcome fear of the virus”. As a result, an estimated 28 lakh persons attended the mela, took holy dips in the Ganga, jostled with each other in the crowded, polluted waters of the river, and then dispersed to all parts of India to spread the virus.

Devotees gather to offer prayers during the third Shahi Snan of the Kumbh Mela 2021, at Har ki Pauri Ghat in Haridwar, Wednesday, April 14, 2021. Photo: PTI

Therefore, to Modi’s surprise – and perhaps only his – there were three and a half million active cases on May 4. Hospitals were full to bursting, doctors couldn’t even reply to anxious calls from infected patients, helplines were overloaded and distress calls received no answer. An acute shortage of oxygen killed patients by the scores every hour.

Although the data has not been released, and may never be, I speculate from personal experience that more people have probably died because of the lack of oxygen than from any other single cause. In fact, the shortage of oxygen is therefore the one issue on which the world needs to hold the Modi government, and Modi in particular, criminally responsible. For there is not a shadow of an excuse for the shortage that has developed.

In a report a report submitted to the Lok Sabha in 2020, a committee headed by MP Ram Gopal Yadav pointed out that the country’s oxygen production capacity was 6,900 tonnes a day; that at the peak of the first wave the demand for medical oxygen had reached 3,000 tonnes a day, but as the wave subsided it had fallen to 1,000 tonnes a day. This allowed the remainder to be diverted for industrial use.

So in March, when INSACOG identified the B.1.1.7 strain as the main threat to the country’s population at the time, the government could have diverted at least 2,000 tonnes a day of oxygen back from industrial centres with a single stroke of the pen. But at the end of March, Modi’s fixation on winning the West Bengal and Assam elections was so complete that he ‘forgot’ to make that stroke of the pen. And by the time he ‘remembered’, it was April 19, and  people were dying in their cars and as their relatives took them desperately to one hospital after the next in search of oxygen.

So in March, when INSACOG identified the B.1.1.7 strain as the main threat to the country’s population at the time, the government could have diverted at least 2,000 tonnes a day of oxygen back from industrial centres with a single stroke of the pen. But at the end of March, Modi’s fixation on winning the West Bengal and Assam elections was so complete that he ‘forgot’ to make that stroke of the pen. And by the time he ‘remembered’, it was April 19, and  people were dying in their cars and as their relatives took them desperately to one hospital after the next in search of oxygen.



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Based on the current trend line of active cases, the growth may be slowing but India will hit its peak only when daily recoveries outpace new cases. There are signs this may be happening in Delhi, which is why other metros need to pay attention to its strategy.

How Long Will the Pandemic Last? Rate of Growth of Active Cases Holds Key.

A woman watches as healthcare workers wearing personal protective equipment (PPE) check the temperature of residents of a slum during a check-up camp for the coronavirus disease (COVID-19) in Mumbai, India June 17, 2020. Photo: Reuters/Francis Mascarenhas

Just over a  week ago, Prime Minister Modi asked his ministers to prepare “emergency plans” to deal with the spike in COVID cases in the five most severely affected states of the country. If one is looking for an admission from the government that its lockdown had failed, then this is it: instead of taking 21 days, Modi’s Mahabharata has lasted over 100 days. And the battle is only growing more intense by the day.

So how long will it last? How long before the case count reaches its peak and starts to decline? After how many deaths? If anyone in the government has an idea, she or he has kept it a deep secret. Mercifully, we have enough data now to make a reasonable estimate by ourselves. The news is not all that good, but the data on the rate of growth of active cases (i.e. total cases minus those who have recovered)  is sufficiently reassuring to make panic unnecessary. While across India, daily new cases are outpacing daily recoveries, the picture in Delhi is somewhat reassuring and could serve as a guide for what needs to be done if the duration of the pandemic is to be shortened.

The following table gives data, from  May 15 till July 6, for the total number of cases, the number of patients who have recovered, and the number of patients under active care.

May 15 has been chosen as the starting date because phase 3 of the lockdown had ended and normal life was just being resumed. It therefore gave the data a fairly uniform base, free of policy change-induced shocks. A comparison of the rates of change in these parameters makes it possible to discern the slowing down of the diseases and, barring, a surge in news cases, broadly map the trajectory of cases.

Of course, a caveat is needed. Two big confounding factors remain testing rates and the government’s denial of community transmission. Recovery rates do increase because that’s the natural course during a pandemic and we won’t discover more new cases unless we test more, which is why leading epidemiologists like Dr Jayaprakash Muliyil think most cases are going under the radar. For this exercise, however, we will take the government’s data at face value.

What the graph tells us

Column 1 shows that although the absolute number of new cases has kept increasing,  the rate of  growth has  slowed from doubling in 14 days till May 29, to 17 days by June 14. It has taken 20 days to double again by July 3-4. This slowdown is welcome, but it is the least reliable (although most quoted) datum for charting the future course of the disease, because it is the one most affected by government interventions.

In India, this is particularly so because a good part of the increase is a product of more intensive – though by no means adequate or even geographically uniform – testing, which has gone up from around 4200 tests per day on March 24, to more than 150,000 today. One consequence of this is the inclusion of a higher proportion of those who are mildly affected by the disease.

Column 2 gives a sense of the number of patients who recover every day. This has been rising much more rapidly than the infection rate throughout the 46 days of the survey, but the rate of recovery too has been slowing down. Recoveries per day doubled in just 9 days by May 24, then doubled again in another 12 days by June 5. This slowed down further after the lockdown was lifted to doubling in 15.5 days ( June20/21). In the last days of June the rate of recovery has slowed down still more, with the doubling rate likely to be 17 days.

Column 3 shows that the higher recovery rate has been mirrored by a slower growth of active cases. Whereas new cases increased by 6.5 times between May 15 and  June 30, active cases increased by only four times. Better still, the doubling rate of active cases has also slowed sharply from 18 days  between May 15 and June 3, to 25 days from June 2 to  June 30.

Columns 4 and 5, plotted in the graph above, give us a sense of the  average rate of improvement in these two parameters per day. It is 0.63% per day in recoveries and 0.54% per day in active cases. A simple linear extrapolation would then suggest the tide turning in September.

While comforting, however, this does not tell the whole story, for all-India, there are more new patients detected with COVID-19 every day than there are patients who have recovered:

The challenge for India is to narrow the gap between the blue and green curves so that eventually daily recoveries outpace daily new infections. That point would mark the peak, though hitting the peak, by itself is no guarantee of the pandemic’s end.  In Europe, China, Malaysia  and several others in Asia, the active disease count fell fairly rapidly after that point as recoveries continue to grow. But then there are also countries which have either plateaued after peaking, or had a resurgence of cases (eg. Iran) thereafter. It is too early to tell which way India will go.

In India, there are three big imponderables. First, the danger of the community transmission we see in large metros spreading to rural areas and smaller cities and  towns. Second, the inadequate amount of testing, particularly in some populous states like Uttar Pradesh and Bihar, gives us an inexact sense of the total disease count. But by far the most disruptive of developments that could derail these predictions is the inability of even the augmented treatment facilities we are putting in place to cope with the sheer number of active cases there will be. By the beginning of September, at the present 25-day doubling rate, active cases will rise to around 1.2 million patients by that date.

Where will so many beds come from? In  2015, Price Waterhouse had estimated that there were 1.3 beds per 1000 population, in India. This amounted to 1.75 million beds, which  was far from sufficient to meet the requirements that arose out of  accidents, diseases, localised epidemics, pregnancies and premature births. Even if  the number of beds has  gone up 50 percent since then, and that all of the increase can be sequestered  for coping with the pandemic, There will still be a shortage of 600,000 beds. The inevitable decline in the quality of treatment that will result from trying to cope, will slow down recovery and increase the number of deaths further.

As the enormity of the problem dawns upon the state governments, the knee-jerk reaction of many of them could be to reimpose lockdowns, or  harden them where they already exist. This must not happen.

Our bitter experience of the past three months has shown that any  lockdown that is not back-stopped by financial sustenance of the kind that was given by the government of  Malaysia, will again fail to contain the disease. But  the harm that it will do to the economy will persist for  years to come. This is because once an airline, a hotel chain, a bank, a mobile telephony company,  an industrial enterprise,  a restaurant or a cinema hall goes bankrupt, debt recovery procedures kick in that make it impossible for it to restart again.  Thus the end of the pandemic will not therefore re-start these enterprises automatically.

Delhi example worth emulating

One way to drastically shorten the fight against the pandemic and minimise the damage to the economy at the same time would be to follow the example that Delhi has set, first during the lockdown, and then after it was lifted at the end of May. Kejriwal, Sisodia, and their ministers understood from the very first day  that the lockdown would deprive millions of workers of their livelihoods for no fault of theirs or their employers, so they  had a moral duty to minimise the hardship the poor, in particular,  would have to suffer.

The government, helped by cadres of the Aam Admi Party, did not  wholly eliminate the distress caused by the sudden loss of jobs because a large proportion of the wage earners, especially the migrant workers,  lived in distant  suburbs across the Uttar Pradesh and Haryana borders, and were therefore prevented  from entering the city by the stoppage of metro trains and buses. But  it did  reduce the stress  and anxiety in the resident working class of the National Capital Territory and therefore its willingness to abide by the lockdown in the containment areas.

The other key decision of the Delhi government – one that the lieutenant governor tried recently to countermand before taking a U-turn –  was to allow mildly affected patients to be treated at home. This reduced the pressure on the city’s medical infrastructure

The second is the introduction of rapid antigen testing on June 18. While this test has been criticised by many, including the WHO, on the grounds that it misses many people in the early stages of the infection, it allows for a much earlier start of treatment of those it has detected, because the results become available in half an hour instead of two days. This has led to a rapid increase in the number of recoveries, and consequently a plateauing of active cases after June 20. It has also raised  the recovery rate to 0.71 %, substantially  above the national average of  0.54%. As the table below shows, this speeded up the daily recoveries dramatically from an average of 400 a day till June 8 to 3,000 a day from June 17. This stopped the number of active cases from rising any further,  and may have begun a marginal decline from June 27.

As a result, the ratio  of recovered to total cases  has risen from 42.7% on May 31 to  66.5% on June 30, at an average of 0.71% per day. This is one reason why Delhi’s graph of new cases and new recoveries presents us with some room for optimism compared to the all India graph:

Since three-quarters of all COVID-19 cases are concentrated in the dozen or so largest cities of India (Delhi and Mumbai alone account for almost a third), if all of them follow Delhi’s example, the number of cases could peak, and the pandemic begin to draw down, earlier than otherwise.

But even here a caveat is needed: Delhi’s testing volumes need to be ramped up and now slowed down.

Note: This article has been edited to clarify that the figure for recoveries in column 2 is the cumulative total till that day, and the difference between total daily recoveries each day is the daily increase in the number of recoveries. It has also been edited to add graphs plotting daily new cases and daily recoveries for India and Delhi. The earlier version erroneously made a prediction of COVID cases “peaking” in September, based on the trajectories of recovered cases and active cases. In fact, cases will peak only when daily new recoveries equal daily new cases.

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Had India done what Malaysia did – kept everyone where they were by ensuring that their economic futures were not imperilled by the lockdown – we would have been in a much better place right now.

The Lockdown Backfired and Modi Has Only Himself to Blame
Low traffic in Ahmedabad, India, March 21, 2020. Photo: REUTERS/Amit Dave


At the beginning of India’s national lockdown, Prime Minister Narendra Modi asked the nation to endure the coming disruption of their lives with stoicism.

“The Mahabharata war was won in 18 days, this war the whole country is fighting against coronavirus will take 21 days,” he said on March 25 in an address to the people of Varanasi.

Not for the first time in the past six years, Modi made a promise he could not keep. On March 25, when the lockdown began, there had been 606 reported cases of COVID-19, of which 87 had been added in the previous 24 hours. As of the time of writing, the corresponding numbers are in excess of 2.97 lakh, rising by an average of 10,000 a day.

Prime Minister Narendra Modi addressing the nation. Photo: PTI

The only sliver of a silver lining today is that the ratio of daily recoveries to new cases has been rising steadily and is now almost 50%. The current spike, mostly attributed to migrant workers returning to their home states, has slowed this to a snail’s pace but not stopped it altogether. If the trend is maintained, the number of active cases will reach a peak and begin to decline in two-three months from now, i.e five-six months after the declaration of the lockdown. That will be a far slower start to recovery than any other country has witnessed from similar lockdowns so far.

What went wrong? The experience of most western European countries has shown that the tougher the lockdown, the sooner has a country reached a peak in the daily addition of cases, the more rapid has been the decline afterwards. When asked why this has not happened in India, BJP ministers and spokespersons, and government officials have brushed the question aside, in essence saying that those are rich nations and our problems are entirely different.

Malaysia’s lockdown

But if that is so, how do Modi and his government officials explain the extraordinary success of Malaysia, a middle-level industrialised nation that was far poorer than us only 40 years ago?

In many ways, the Malaysian government ’s lockdown experience has been similar to ours. It announced a national lockdown on March 18, six days before we did, designed to end on May 12 a week before our phase 3. But on May 4, under pressure from industry, when it lifted some controls on public transport, and congregation in workplaces, four out of its 13 states refused to implement these. On May 10, following a public petition signed by half a million Malaysians, it extended this partially relaxed lockdown for another month till June 9.

A worker sprays disinfectant at a mosque, which is closed during the movement control order due to the outbreak of (COVID-19)
in Kuala Lumpur, Malaysia. Photo: Reuters/Lim Huey Teng

It is the impact of the two lockdowns that has been starkly different. For unlike ours, Malaysia’s has been a total success. The infallible yardstick there, as here, is the new case to recovery rate ratio. Starting from 13% of new cases on March 18, the recovery rate rose rapidly till it exceeded the number of new cases for the first time on April 6 and then stayed above it for 53 out of the next 64 days till the lockdown was lifted on June 9. By June 8, the total number of COVID-19 cases the country had experienced was 8,319. The number who had recovered was 6,694 – 80%. The number of new cases on June 8 was only seven.

Malaysia’s success cannot be ascribed to a higher level of development, better health service or more efficient administration. It arises from the government’s very different concept of its duty towards its people. From the incipient, planning stage of the lockdown, the government recognised that the severe dislocation of the economy it would cause could not be compared to an economic recession or a natural disaster. The first resulted from vagaries of the domestic and international market and could be mitigated by countervailing policy measures. The second could be as catastrophic as a lockdown but the government could not be blamed for it. But the lockdown was a conscious act of government. It therefore imposed a specifically moral obligation upon the government to make sure that the victims – employers and employees – suffered as little from it as possible. Malaysia’s Prime minister, Muhyiddeen Yassin accepted this from the outset. Modi did not and still has not.

The Malaysian government, therefore, recognised that the lockdown would cause a crash in sales and drying up of revenues. This would make it difficult for employers to meet their fixed costs and wage bills, and destroy income and demand. This had to be prevented at any cost. The government, therefore, decided to spend whatever was needed to meet the production and minimum wage and salary costs that would have to be paid to keep factories in working condition and workers in place to resume work when the lockdown was lifted. It estimated that this would require it to provide fiscal stimulus of up to 14% of its GDP. Indeed its preliminary estimate was 17%. This was the highest deficit financing limit set by any country in the world.

As a result, Malaysia has suffered little or no social or economic dislocation from the lockdown. Although a large part of its 15.8 million labour force consists of internal migrants, and several million more are foreign workers, the sudden loss of income, home and security that has driven more than 10 million despairing migrant workers in our country to set out for homes in distant villages by any means possible is signally absent. Instead, the government has put pressure on employers to register their undocumented foreign migrant workers and provide them with the dormitory accommodation that is required by law. Their number, fortunately, is relatively small because, again unlike us, the state has a law that requires employers to register all new employees with the social health authority within 30 days of hiring them.

India’s lockdown has failed because the sense of moral obligation that has driven Malaysia’s policies is completely absent. In its place Modi made prayashchita (atonement) the guiding principle of policy: a great evil had descended on the world. To fight it, one had to be willing to suffer.

Crash in demand

The crash of demand that has followed the lockdown is, therefore, one that no other economy has experienced. The demand for electricity fell by nearly 30% in April. The demand for transport fuels fell so sharply that oil refineries had to halve their production.

Maruti, the automobile industry leader, did not manufacture a single car or commercial vehicle in April and almost none in May. It met the few export orders in hand from stocks that had accumulated after the sudden imposition of the GST last year.

The Maruti plant in Manesar around which several ancillary activities have grown, giving employment to migrant workers.
The lockdown meant cessation of work, no wages, or partial payments. Photo: Rahul Roy

Bajaj Motors, the other Indian automotive giant, sold no vehicles in India in April. It continued to produce at a skeleton level, but entirely for export. Even there it experienced a fall of 80% in sales (32,009 two-wheelers and 5,869 three-wheelers in April, against 160,393 two-wheelers and 38,818 three-wheelers in the same month in 2019).

SIAM, the Society of Indian Automobile Manufacturers has predicted that if a demand boost does not come now production this year will decline by 35-40%. And ACMA, the Automobile Manufacturers’ Association says that it has lost $57 billion dollars worth of sales. This is 2-3% of India’s GDP.

The textiles industry is in equally bad shape. A survey of 2,000 firms by A.C. Nielsen showed that their production had dropped by 84% since the lockdown. Much of what was still being produced was personal protective equipment (PPE) clothing for health workers. The textiles industry employs 105 million workers, second only to agriculture. Thus most of the 114 million persons who lost their jobs by the beginning of May were probably from this industry.

The construction industry, which used to create 40% of India’s non-agricultural new jobs every year, is in a coma because, with the departure of migrant workers, it faces an acute shortage of labour, rising wage rates and lower EMI payments by financially stressed homeowners.

And finally, there are the travel, hospitality and entertainment industries that account for a quarter or more of the GDP and are, collectively, the largest employer after agriculture. These have been hit both by the need for social distancing and the sharp fall in income and demand in the economy.

Had India done what Malaysia did – kept everyone where they were by ensuring that their economic futures were not imperilled by the lockdown, the number of COVID-19 cases would have peaked very much earlier, even in the most crowded of our cites, and the virus would not have been carried to the villages. Best of all, the economy would have remained poised to jump back to normal the moment the lockdown was relaxed.

But Modi had other goals. He wanted to emerge from the battle against coronavirus as Arjuna had emerged from the battle of Kurukshetra, steely, determined and invincible. Now that he has exposed his own lack of capacity to deal with real as distinguished from self-manufactured emergencies, instead of changing course and pumping purchasing power into the economy, he is busy fashioning another image of himself as the lone champion of ‘self-reliance’ in an increasingly ‘sold out’ economy.

One can only hope that when this too fails, India’s voters, who placed their faith in him for a second time in May last year, will recognise him for what he is.

Note: An earlier version of this article erroneously stated that Modi’s Mahabharata reference was made on March 24. It was, in fact, made on March 25.

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To save the economy, a phased relaxation of the lockdown is needed. If a COVID-19 calamity is not to be replaced by an economic one, this must start well before the new lockdown period ends.

With the Lockdown Extension Coming, It’s Time to Turn Our Attention to the Economy

Sacks of unsold vegetables in the mandi, that are slowly starting to rot in the harsh sun. Credit: The Wire.


The happy consensus between the prime minister and all chief ministers that the national lockdown needs to be extended for another two weeks cannot hide the fact that when Narendra Modi ordered the shutting down of all ‘non-essential’ activity on March 24, neither he nor his  advisers had thought through what the consequences would be – and when and how it could be lifted.

In the past couple of days, it has become obvious that the state governments, with one or two notable exceptions, have no idea either.

China had done a lockdown in Hubei province, and succeeded in containing  the virus.  Five other countries – France, Italy, New Zealand, Poland, and the UK – had, or were about to declare a similar lockdown. Modi’s India had to be among the first.

It is clear that, so far as the economy is concerned, no decision-maker in India has the faintest idea of what to do next. In the first days of the lockdown this was excusable: the tacit assumption was that the number of new cases would start to come down after two weeks of its imposition, as had happened in Hubei. The government would therefore be able to lift its punishing restrictions when there were no more new cases

Instead, the opposite happened, and the number of active cases  ballooned from 519 on March 24 to 7,367  on April 12. The lack of a contingency plan – in fact of any plan whatever – became apparent when millions of migrant workers who had been thrown out of work and dwelling began a desperate march home to villages hundreds of kilometres away with the little money they had saved and what their employers had given them. Had it not been for the prompt action of the state governments, and the kindness of people on the roads, this could have turned into a major humanitarian disaster.

The happy consensus between the prime minister and all chief ministers that the national lockdown needs to be extended for another two weeks cannot hide the fact that when Narendra Modi ordered the shutting down of all ‘non-essential’ activity on March 24, neither he nor his  advisers had thought through what the consequences would be – and when and how it could be lifted.

In the past couple of days, it has become obvious that the state governments, with one or two notable exceptions, have no idea either.

China had done a lockdown in Hubei province, and succeeded in containing  the virus.  Five other countries – France, Italy, New Zealand, Poland, and the UK – had, or were about to declare a similar lockdown. Modi’s India had to be among the first.

It is clear that, so far as the economy is concerned, no decision-maker in India has the faintest idea of what to do next. In the first days of the lockdown this was excusable: the tacit assumption was that the number of new cases would start to come down after two weeks of its imposition, as had happened in Hubei. The government would therefore be able to lift its punishing restrictions when there were no more new cases

Instead, the opposite happened, and the number of active cases  ballooned from 519 on March 24 to 7,367  on April 12. The lack of a contingency plan – in fact of any plan whatever – became apparent when millions of migrant workers who had been thrown out of work and dwelling began a desperate march home to villages hundreds of kilometres away with the little money they had saved and what their employers had given them. Had it not been for the prompt action of the state governments, and the kindness of people on the roads, this could have turned into a major humanitarian disaster.

However, as some studies from Singapore have confirmed, central air-conditioning in buildings may pose risks,. Could the ubiquity of air-conditioning in Singapore and the Gulf countries like Bahrain, Qatar and Kuwait, therefore account for their much higher infection rates than India? Or the fact that they have higher ‘expat’ populations that may have been exposed to the virus in their home countries?

Either way, with the summer upon us, it may be necessary to keep centrally air conditioned establishments and offices locked down and limit travel in air conditioned trains and buses – whose filters are not as efficient as those on modern aircraft – till no more new cases have been reported for some time. The travails of the well to do  are not therefore going to end soon. But that does not mean the poor have to suffer with them.

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By springing the lockdown on millions of migrant workers, the Modi government has once again shown a combination of unseemly haste and organisational ineptitude.

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Migrant workers wait to board a bus to their respective villages during the national lockdown, at Kaushambi, Ghaziabad, March 29, 2020. Photo: PTI/Ravi Choudhary

With every hour that passes, the fate of India’s poor is being sealed more and more firmly. That fate is to confront possible death at the hands of COVID-19. As I had feared, employers have responded to the sudden and country-wide lockdown and the consequent total cut-off of their cash flow by firing their workers. And the workers are heading “home”.

When they reach their homes in the villages and small towns, these will turn it into death traps.

An NDTV news report from two days ago showing migrants thrown out of work at Unnao in Uttar Oradesh walking 90 km ‘home’ to Barabanki was greeted by a storm of unimaginably obscene abuse by self-appointed Modi bhakts, who berated the channel for trying to use a national emergency to defame their hallowed leader.

But within 24 hours of that venomous outburst, district magistrates in every metropolis of the country were scrambling to find buses to take migrant workers ‘home’.

That ‘home’, the village, could become a death trap. Even as I write, the number of confirmed COVID-19 cases in India has jumped from 834 to 980. At least four times as many people have had the disease but are likely to recover by themselves. There are thus at least 4,000 others out there spreading the disease without knowing it even as I write.

The lockout is only in its fifth day, so each of them will have been in contact with a large number of persons even before it began. What is more, among the poor, it has only reduced, and cannot eliminate, close social contact. So there are ten more days in which anyone who is infected, whether he or she knows it or not, can infect other people.

In the 14 days between getting infected and overcoming the virus, each of them will have been in close proximity with scores of persons. So we are virtually certain to see a rapid spread of the disease in the coming days.

How fast can it be? We now have one concrete measure of the speed with which the virus can spread when the migrants get home: A Sikh priest who returned to India after two weeks in Italy and Germany on March 6 broke quarantine and visited Anandpur Sahib and 15 villages before he died on March 18. He is believed to have infected 23 persons, including 14 from his own family, before he died.

Health workers spray disinfectant in Chikmaglur, March 28, 2020. Photo: PTI

But this has to be a gross underestimate because 80% of those who get infected recover on their own. However while they are doing so, they too are carriers of the virus. Thus, that one Sikh priest must have infected more than a hundred persons.

This gives us an idea of what the approaching pandemic will look like if the outflow of migrant workers is not stopped within the next day or two. At this hundred to one ratio, if only ten out of India’s 139 million migrant workers travel home in the coming days and even one in a thousand of them is carrying the virus when he boards the bus, ten thousand carriers of the virus will have fanned out into the villages within the next fortnight. There the multiplier is likely to be far smaller, but even so, we are already staring a pandemic that can infect millions in the face.

All this could easily have been anticipated and forestalled, for the Sikh priest died six full days before Prime Minister Narendra Modi announced his total lockdown of India. The size of India’s unorganised sector and its component of migrant workers is well known, and the ruthlessness of their employers is also well known. And any good undergraduate student of growth economics could have told it that a total lockdown of the country would mean instant unemployment for hundreds of millions of workers.

It is therefore difficult not to conclude that the Modi government has once again shown a combination of unseemly haste and organisational ineptitude, which made such a mess of demonetisation and the introduction of the Goods and Services Tax during its first term in office.

This is not, however, the time for finger pointing. Seven actions can still minimise the spread of the disease to the rural areas. These are:

1. Immediately ban the laying-off of workers in all sectors of the economy and make it a punishable offence.

2. Meet the fixed costs of all working establishments – airlines, bus companies, manufacturing companies and wholesale and retail stores of all sizes, on condition that they do not lay off, and especially, not send away migrant workers.

3. Meet 50% of the wage bill of all non-migrant workers. If they are provided accommodation quarantine them there.

4. Base compensation on documentary proof of the finances of the enterprises and make it strictly conditional upon their following these rules. Breaking them will not only mean cessation of aid and recovery proceedings being taken, but also imprisonment for the employer.

5. Make it a criminal offence to throw anyone out of a rented accommodation during and immediately and for at least a month after the lockout period.

6. Then seal off all the major cities from the countryside. This is the most effective way surest way to virus must not be allowed to get to the villages.

7. Finally call out the army and paramilitary in aid of civilian authority, to set up camps for the homeless and the indigent, where they can be fed, medically tested and housed in tents.

After that, pray.

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The first set of relief measures will do nothing to avert the catastrophe that has befallen millions of migrant workers in Indian cities. And as they head home to their villages, some will carry the coronavirus with them.

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Daily wage labourers, now out of work, are walking back to their villages which are at least 200 km away. Photo: Shome Basu/The Wire


COVID-19  has reminded the world of its essential interdependence and need for unity of purpose. It has done the same for India. For the first time since the Bangladesh war, the entire country has set aside its bitter and divided politics and reacted as one to the challenge it faces. The prime minister, who announced a three-week lockdown of the entire country on March 24, was not the eternally grandstanding politician we have become familiar with in the past six years, but a sober leader taking an incredibly difficult decision, announcing exemptions that would minimise the hardship being imposed on the people, and asking for their co-operation.

There is little doubt that he will receive it. But the economic cost of the lockdown will be high, and could become prohibitive if it has to be extended. Unfortunately, the first ‘relief measures’ announced by finance minister Nirmala Sitharaman show that the government has little understanding of the enormity, or even the very nature, of the task it is facing.

The key feature of the lockdown is that it has broken the vertical and horizontal transport links that are the warp and weft of the market economy. With that, unless immediate measure are taken to prevent it, first consumption, and then production, will grind to a halt. As it gets prolonged, the market economy itself will wither away.

The list of exemptions announced by the government after Modi’s speech did not go beyond the need to minimise the immediate impact of the lockdown. Access to food and medical shops, and essential services, including the home delivery of food and medicine, have been exempted. But these make up only a  fraction of the total economy. And even here, the ingredients of production have to be assembled and the finished product transported to the consumer. Neither can be done, especially in India, without sustained human interaction. As for the rest of the economy – its agriculture, its industry and its vast services sector – not one of the ‘ten big announcements’ made by Sitharaman today even touch upon this challenge.

The finance minister’s package

I will not dwell on these in detail, because there are more urgent issues to raise and discuss. But suffice it to say that

  • four of the 10 provide relief to the rural population when COVID-19 and its impact is centred in the cities;
  • one, that is by far the most important, provides essential insurance protection to two million health workers but involves no immediate expenditure;
  • two offer direct cash and food transfers to the poor but again make no distinction between the urban poor, who are under lockdown and the rural poor who are not;
  • The remaining three are intended to benefit workers in the organised sector whose jobs are not threatened and who already have all the access they need to essential services through primary health centres and the kendriya bhandars and ration shops.

The common feature of all the 10 measures is a continuation of the top down handout system of distributing benefits that has been the bane of the poor since the very first years of India’s self government and is still prone to leaks and diversion.

In the urban areas, the lockdown has completed the disempowerment of the already desperately vulnerable poor. Small- and medium-sized owner-managed enterprises are not only dismissing their workers but throwing them out of the accommodation they have provided them on the pretext that their presence is a health hazard to the family. Grocery and medicine shops that do not need to close have opted not to open because the reduced sales no longer make it worth their while to keep them open. And far too many of them are laying off their staff, at least till the lockdown is over.

No modern economy can withstand such disruption for very long. When a factory, a hotel, an airline, a bus company, or a shop downs its shutters it does not cease to incur costs. Interest and amortisation payments on loans continue to accumulate; buildings and machinery have to be maintained; rents on shops have to be paid, costs incurred on electricity have to be met. And in the organised sector, few employers will be willing to lay off their key workers even temporarily, without offering them some compensation to tide them over the period of shut down.

If this is to be minimised the government must meet these costs during the period of the lockdown. But only one of the ten measures that Sitharaman announced has even touched upon this need. And what it has offered – the payment of three months of employer and employees’ provident fund payments to companies with up to 100 employees in which 90% of the staff is paid less than Rs 15,000 per month –  is simply pathetic.  In most enterprises, fixed costs make up 30 to 40% of the total cost. The wage bill, by contrast almost never goes beyond 30% and is usually lower. The combined EPF contributions come to a fifth, at most, of this 30%.  Thus all that the government has offered is to meet one fifth to one-seventh of the fixed costs of a small fraction of the modern economy.

Since they are no longer able to earn, most of these enterprises will start cutting costs wherever possible. The only area in which they can do so is labour. And here the axe has already begun to fall most dramatically in the unorganised sector. With enterprises forced to close, work stopped, and the government not even aware of the need to keep them going if the economy is to restart smoothly after the lockdown, labour has become redundant anyway. So why not throw your workers out and let them fend for themselves? And with 94% of India’s 500 million-plus non-agricultural labour force belonging to the unorganised sector, with no contracts and no union to protect them, layoffs are easy and have already begun.

Crisis for footloose labour

A steel fabrication plant in Unnao, UP, has simply thrown its workers out of the accommodation it had given them and told them to fend for themselves. With nowhere to stay and little money, they are walking home in the blazing sun to towns and villages as far as 80 kms away. On the very morning before the lockdown, The Hindu had carried a photograph of migrant workers in Chennai waiting at the central railway station for a train to take them home. One can only wonder where they are now and how completely abandoned they must be feeling.

According to the 2011 census, 139 million, or more than a third of India’s labour force, worked in places far away from home. Of these, the Economic Survey of 2017 reported, about 9 million were working in other states, from where they can only go home by train or bus. These nine million must be the government’s first responsibility.

Keeping them safe is not an act of charity. If even one in ten of the country’s 139 million migrant workers gets home, and only one in a thousand of them is a carrier of the virus, then India’s villages will be inundated with nearly 14,000 new focal points for its spread. If that happens we will learn the true meaning of that much overused word, pandemic.

India is not China

The government’s response to the threat has so far been pathetic, but this is not because it does not care. So far, all of it has been  predicated on the unspoken assumption that the pandemic can be brought under control in three weeks. But this is wishful thinking. China is the only country that has succeeded in stopping the spread of the virus through a lockdown so far. But India is not China.

India has more than 600,000 villages, and its central and state governments have little or no knowledge of what is happening in most of them. By contrast, the Chinese Communist Party is present, and has a committee, in every single village of the country. It is able to have these because it has 70 million members. This is four times the combined strength of the central and state government bureaucracies in India, and these 70 million function in a country where accountability to higher authority is close to complete.

Despite having such resources, China imposed a total lockdown only in Hubei province, where COVID-19 started. And it had to keep it going for three months – not three weeks – to bring the virus under control. In India, once the virus reaches the villages only the extreme heat of summer will be able to check its further spread and that effect, while likely, cannot be taken for granted.

The first thing that the Central and all state governments must, therefore, do is to make sure the virus remains confined as far as possible to the 80 cities which are under total lockdown today. This will require a marshalling of all the power and organisational capability of the state. The surest and fastest way will be to call out the army and put as large a part of the paramilitary forces as possible at the disposal of the state governments. Two brigades of the army are already deputed to come to the aid of civilian authority in  every state. While this provision was intended to help them maintain order in a crisis that had gone beyond civilian control, it can, and should, be used to harness their organisational skills and medical capabilities to cope with the present health emergency. Indeed, why Prime Minister Modi did not invoke its aid on March 24th itself is one of the puzzling features of his address to the nation that evening.

The armed forces and Central paramilitary forces have the logistical and medical capability to set up and administer relief camps in open areas – such as parks, sports grounds, stadia, and the outskirts of the cities, provide them with food and skilled medical care, and enforce social segregation within them through the period of quarantine.  But can they handle even the 9 million out-of- state migrants who face total abandonment today, let alone the 130 million in-state ones?

Carrot and stick for unorganised sector employers

The solution to this longer term problem lies in the Indian state making the employers of unorganised  labour responsible for its safety and security during this time of crisis. It can –indeed, must – do this  by instituting an appropriate set of  incentives and imposing a corresponding set of penalties to make sure that they do so.

The incentive should be that, based upon their previous year’s tax returns, or in the case of household enterprises their verified accounts, the central and state governments will meet all of their fixed and the labour portion of their variable costs provided they continue to house and feed their migrant workers, and to pay at least half of the salaries of their local employees. This will not only save the lives of the migrants and prevent the spread of COVID-19 to the villages, but prevent the economic crash that is bound to follow the sudden cessation of economic activity in the country.

The penalty for not doing so, or evading the commitments they make when receiving government support must be prison.

Loosen fiscal and monetary policies

Given India’s dismal record in the management of its economy during the past eight years,  and its surging fiscal deficit today, this move is likely to be opposed by bean counters in the RBI and the Ministry of Finance. But the government must, for once, overrule them – because further bean counting will complete the ruin that was already staring the Indian economy in the face before the coronavirus arrived.

Nirmala Sitharaman has now to  listen to the real macro-economists in the system – like Pranab Sen, Rathin Roy, Rajiv Kumar, and her own chief economic adviser – who can explain the vast difference between increasing the money supply in a healthy economy in normal times and doing so when there has been a sudden collapse of demand caused by an external calamity. The first increases consumption and can trigger inflation. The second sustains present consumption in order to protect future production and growth. Strictly speaking therefore, it is not consumption but an investment whose returns will come in the near future.

Economists all over the world have warned their governments that the recession which lockdowns without pump priming will trigger could prove as costly as the pandemic, even in terms of human life. In the US, they have warned against a “Rolling Recession”:  first a collapse of demand as people cease to buy; then a sharp drop in production as retailers postpone new ordering; then layoffs of workers and a further shrinkage of demand.

In New Zealand, which imposed a 4-week total lockdown only a day ahead of India, they  have predicted a rise in the unemployment rate from its current 4% to between 15 and 30% .

Even in Italy, the worst affected European country, Edoardo Campanella, an economist at UniCredit Bank in Milan, warned against too drastic a response as recently as last Tuesday, saying “The global health crisis is rapidly morphing into a global recession, as there is a clear tension between preventing infections and ruining the economy.”

Learn from the world

To combat this impending recession, more and more countries are returning to Keynesian pump priming to sustain demand till the COVID-19 crisis is over.  Some idea of how much pump priming will be needed  may be had from the bill President Trump has introduced in the US Congress. It is for contra-cyclical spending of  $ 2 trillion in the next few months. This is ten percent of the GDP of the richest nation in the world. Trump has done this in a nation (and as the leader of a party) that is wedded to neo-liberal economics because both have gained the most from forcing neoliberal doctrines upon the rest of the world. He has done this not to win an election but because US unemployment benefit claimants have surged in the wake of its lockdown from 211,000 to 3.28 million. Other industrialised country governments  are following suit regardless of their differing political perspectives.

Critics of the Modi government are right when they point out that it should have thought through all this, before announcing the lockdown. But we do not live in an ideal world. Decisions have to be taken under pressure, and while Prime Minister Modi can be accused of excessive haste on other occasions, this is not one of them. However, now that the decision has been taken, the government must rely upon common sense and intuition and not go through the rigmarole of setting up “multi-layered task forces” and allowing them to come up with a “consensus-based policy”. For by the time they do so, desperate migrants who have not either starved or been felled by heat as they trek hopelessly homewards, will have begun to reach their villages. After that, only the extreme heat of the summer might be able to help India avoid the pandemic that will follow. And that is not yet a given.

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