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India in the Age of Coronavirus: a Global Time Bomb?

BLOG - 31 March 2020

Recently, the Washington Post wondered whether South Asia and its two billion people, more than one fourth of the world population, would be the next hot spot of the coronavirus outbreak. Over the last few days, this concern has gained pace as India – on which we will focus – is recording the first deaths from the virus.

What does the current health situation reveal ?

The epidemic hit India late, with only very few cases officially reported till mid-March – although the first cases had already been revealed in January. This delay was partly due to the lack of a large-scale screening campaign: only people arriving from at-risk countries were tested.
 
This decision was explained in a surprisingly candid manner by officials from the Indian Council of Medical Research (ICMR). To them, it was preferable not to test more people because India neither had enough test kits to conduct a real screening campaign, nor the hospital infrastructure to accommodate patients who would have been identified.

In his first speech on the matter on March 19th, Narendra Modi merely advised the Indian people  to stay home the following Sunday.

However, an additional effort has been made since mid-March: new laboratories have been authorized to produce tests, and new testing centres have opened, both by the public and private sectors. Nevertheless, this endeavor remains limited: from 52 public centres in mid-March to almost 100 a fortnight later, not counting private laboratories which, more often than not, charge very expensive fees for tests.

As India will obviously not be able to follow the South Korean strategy of systematizing screening, it has pogressively adopted a strategy of containment. In his first speech on the matter on March 19th, Narendra Modi merely advised the Indian people  to stay home the following Sunday. This "Janata curfew" (people's curfew) was all the more unevenly observed as some states of the Indian Union (governed by opposition parties) refused to join in and Indian citizens, who saw it as a voluntary measure, refused to comply with injunctions from the police when it intervened. It should also be noted that many of those quarantined have left their confinement because of the often unhealthy condition of isolation wards.

One day of confinement – even more so on a Sunday – was in any case not an adequate response to the scale of the problem and finally, on the following Monday, Prime Minister Modi announced a 21-day lockdown. Surprisingly, the Indian population was only given four hours between the announcement and its implementation. This decision was made on March 24, after Delhi had banned gatherings of more than five people while Maharashtra, Punjab, Tamil Nadu and Orissa had already decreed an official containment.

What risks does India face in the medium term?

India's vulnerability to an epidemic of this kind is aggravated by several factors:

  • the country's population densities, including in rural areas where they sometimes exceed 1,000 people per square kilometer;
  • the crowded conditions in which poor families live, starting with slum dwellers, who make up 25-30% of the population of the largest cities;
  • hygiene-related issues which have led personalities such as Priyanka Gandhi (the daughter of Rajiv and Sonia Gandhi) to broadcast videos showing how to wash hands – a rare occurrence for those with only random access to water points in a country where an estimated 45% of Indian households have a tap;
  • the prevalence of particularly high-risk populations, whether victims of diabetes or those affected by tuberculosis or other lung diseases: there are more than 6% of diabetics in India and 2.7 out of 10 million tuberculosis patients worldwide are in India according to the WHO.  

 
Second, the epidemic is set to spread from cities, where it originated, to the countryside because of several push factors: the lockdown has resulted in the closure of factories and the suspension of most of the means of transport, whereas social distancing measures promoted by the Indian government has resulted in the layoff of many domestic workers – a plentiful workforce. All these people have been forced to return to villages in Bihar, Uttar Pradesh, Orissa and elsewhere, where these migrants often come from and where they are taking the coronavirus, an urban phenomenon till then.

Thirdly, India's health system is one of the most deficient in the world. According to the OECD, India has only 0.5 hospital beds per 1,000 inhabitants, compared to 3 in Italy, 6 in France and 12 in South Korea. Similarly, India has 0.8 doctors per 1,000 inhabitants, compared to 1.8 in China, 3.2 in France and 4.2 in Germany. And still, much of this concerns the private sector, with a limited access to the approximately 20% of the population that makes up the country’s middle class. Stagnation of public investment in the health sector – which has never exceeded 1.2% of GNP (compared to an average health expenditure in Low Income Countries, which include India, at 1.57% of GDP according to the World Bank) and represents 4% of the state budget since the end of the 1980s – has only been partially offset by the growth of the private sector, which now accounts for 51% of hospital beds.  
 
Under these circumstances, it appears likely that the Indian healthcare system will soon face a massive influx of patients that it will not be able to treat.

Sanitary, political, economic and social implications

The human toll of the epidemic is likely to be very high in terms of the number of people infected, although the youthfulness of India's population will undoubtedly mitigate its impact (today, 46% of Indians are under 25 years old). If 5% of adult Indians contract the disease, the number of patients to be treated would amount to  40 million – with only 710,000 hospital beds.
 
Economically, the pandemic comes at a time when India's growth rate has fallen below 5%, compared to 7-8% two years ago. The slowdown, which is reflected in a consumption and investment drop, is linked to the serious difficulties of a banking sector plagued by bad debts. On the one hand, public authorities, deprived of tax revenues, are facing a budget deficit of around 10% of GDP (all actors combined, including federated states and public enterprises). On the other hand, banks are not in a position to ease credit access – especially following the bankruptcy of one of them, the Yes Bank, last February. Not only will New Delhi not be able to implement the huge privatization program that was included in the Finance Law – who would consider the acquisition of  Air India today? – but above all the Modi government lacks the resources to support companies and individuals.

Today the government of India is not in a position to execute a massive relief program for this very reason. The package announced last week by the finance minister for helping the economically  endangered represents about 1 % of the GDP. With a mere transfer of Rs. 500 (5,93 euros) to women Jan Dan account holders or a minimal increase of MGNREGA wages from Rs. 182 (2,16 euros) to Rs. 202 (2,40 euros) a day, the package will not help the poor much. Similarly, the SMEs in India, which employ over 40% of the Indian workforce, are facing the biggest hit due to the lockdown as the relief package does not cover their fixed costs, which make up to 30-40% of the total cost. This has resulted in cutting costs by dismissing workers, all the more so as they are now redundant during the lockdown period. It is important to note that the relief package initiated by the central government is also rather limited in comparison to those of some states of the Indian Union, including Kerala, a model in terms of welfare state.

On the political level, Narendra Modi benefits, for the moment, from a situation that values the strong man figure – which he has embodied for years. Was he not re-elected in 2019 largely because he had responded militarily to jihadist attacks attributed to Pakistan? His speech on March 19th made him the man of the hour and the rallying point of an entire nation. But by preaching unanimity, he versed in politics more than was expected from those who counted on him to announce economic measures. Subsequently, the little time people were given to adjust to the lockdown has created some resentment vis-à-vis the government. More importantly,  the plea of the migrant workers who were forced to go back home by foot provoked an uproar on the social media, all the more so as, in the following days, more people died on the road than in hospitals because of the Covid-19...  

Modi, instead of coordinating the central government and the state governments’ responses to the pandemic [...] has simply not deemed it useful to consult the state governments’ heads.

One of the political effects of the pandemic may be the tensions that the management of the crisis may create between New Delhi and opposition-led states (which are in the majority). Modi, instead of coordinating the central government and the state governments’ responses to the pandemic, a phenomenon that falls constitutionally under both levels of governance, has simply not deemed it useful to consult the state governments’ heads, unlike what was observed in 2009 during the SARS epidemic. The cohesion of the Indian Union is also undermined by the closure of their borders, which many states (even those governed by the same party) are carrying out.

On the social front, the crisis comes at a time when the economic slowdown mentioned above has already revealed the extent of the structural evil that has plagued Indian society for the past twenty years. The widening of inequalities, for the first time since the 1970s, has led to an increase in the percentage of Indians living below the poverty line between 2011-12 and 2017-18. This trend, linked to the decline in Indian agriculture, will inevitably be aggravated by the unemployment of millions of people in the informal sector, which accounts for 80-90% of the working population, while the unemployment rate for the 20 to 24 year-olds is already 37%.

What outcome for India after the health crisis?

If it is too early to say how widespread this crisis that is only starting will be, there is little doubt that India will be badly affected, in medical as well as economic terms. The scale of the crisis may be mitigated if private hospitals are involved in the fight against the pandemic – such as the Jaslok Hospital in Mumbai which seems to have been the first private hospital to open its doors to Covid-19 patients – and if a screening and containment effort is effectively implemented over a long period of time.

The results of his policy and its effects in terms of morbidity, economic decline and social distress will be the yardstick against which Narendra Modi's record will be assessed, as the crisis is likely to dominate his second term. The international lens should also be considered besides the domestic one: how will India's strategy be evaluated in comparison with other countries, and particularly China, where last week Jack Ma promised 210,000 test kits to all South Asian countries except India? New Delhi risks witnessing, powerless, an even greater Chinese push at its borders due to the pandemic.    

 

 

COPYRIGHT : JEWEL SAMAD / AFP

 

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