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  • Coronavirus – Economic Issues

    East India will require heavy investment to tide over the post-Covid loss of livelihood

    op-ed snap | Economics | Mains Paper 3: Indian Economy

    The article discusses the issue of migrant labourers and the problems eastern states could face due to the return of labourers and the lack of employment opportunities in these states. The return of migrant labourers may lead to the mechanisation in the states where they worked. A relief-cum-stimulus package at least 5% of the GDP is suggested by the author.

    IMF’s projections for the economy

    • The IMF’s projections for GDP growth for this year seem to be either in the negative or below 2 per cent for almost all major countries of the G-20 group.
    • India could do a little better compared to the other BRICS nations, but its growth will most likely be below 2 per cent.
    • This, of course, is under an optimistic scenario.
    • Many experts reckon that India could also go into negative GDP growth this year if it does not reboot the economy properly and in time.

    The problem of collapse in demand

    • The Centre and the Reserve Bank of India are trying to remove all roadblocks so that factories and farms can resume operations.
    • The focus is largely on the supply side — how to ease restrictions and how to increase liquidity in the system for resuming production.
    • It may not take too long as the real problem is the collapse in demand.
    • And that demand may not pick up easily as the virus is likely to stay with us for quite some time.
    • We could have lockdowns again if there is a surge in infection.
    • This will surely limit our travel and restrict our shopping for non-essentials.
    • However, there is one demand that can easily revive — that of food.

    Why food demand matters?

    • The NSSO survey of consumption expenditures for 2011-12 revealed that about 45 per cent of the total expenditure of an Indian household is on food.
    • For the poor, the NSSO reckoned, this figure was about 60 per cent.
    • We do not have information about the consumption patterns in 2020, guess is that about 35-40 per cent of the expenditure of an Indian household is on food and for a poor household, this figure is around 50 per cent.
    • Herein, lies the scope to reboot the economy.

    Labour shortage and mechanisation

    • The sudden announcement of the nationwide lockdown gave labours no time to go back to their families.
    • They lost their jobs and incomes and having spent whatever little savings they had, these workers have been reduced to penury.
    • The Centre and states, despite their best efforts, have not managed to address the problem of hunger of these workers.
    • Even civil society has not managed to bridge the gap.
    • The migrant labourers may well have lost their trust in the state, and once the lockdown is lifted, most of them are likely to rush back to their families in villages.
    • And, it could be some time before they are back in the cities — that is, if they return at all.
    • So, farms and factories, especially the MSMEs in the relatively developed states of western, southern and north-western India are likely to face labour shortages for many months, perhaps years.
    • This could lead to more mechanisation of farms and factories in these states.
    • In Punjab, for example, most of the wheat harvesting is already done by combined harvesters.
    • Now even paddy harvesting could be done by mechanised harvesters.

    The double challenge for states which are home to migrants

    • However, eastern Uttar Pradesh, Bihar, Jharkhand, West Bengal, and Odisha, from where much of the migrant labour comes, will face a double challenge.
    • Their agriculture, with tiny farm holdings, is already saddled with a large labour force — this comprises 45 to 55 per cent of the total labour force of these states.
    • Non-farm income from wages and salaries, through migrant labour, was an important source of income for households in these states.
    • This is now severely hit. In all probability, the per capita rural incomes of these states could shrink, at least in the short run.
    • This could lead to poverty and increase hunger and malnutrition.
    • How does one then reboot the economy and also address hunger and malnutrition?

    The lockdown and the subsequent plight of the migrant labourers brought to the fore uneven development in the country. The points mentioned below suggest the ways to address this problem. A question based on this issue could be asked by the UPSC, for ex- “The issue of migrant labourers amid Covid-19 pandemic highlighted the uneven development in the country. In this context, state the reasons which led to the uneven development of various regions of the country. Suggest ways to address the problem”.

    The requirement of a special investment package for eastern states

    • A special investment package — like the Marshall Plan of USA in 1948 — for the eastern belt of India is required.
    • Investment should be used to build better infrastructure, agri-markets and godowns, rural housing, primary health centres, schools and enhances people’s skills.
    • The package will go a long way to revive the economy and augment the incomes of the migrant workers.
    • Rising incomes will generate more demand for food as well as manufactured products, giving a fillip to the growth engines of agriculture as well as the MSME sector.
    • Building better supply chains for food directly from farm-to-fork, led by the private sector, will enhance the export competitiveness of agriculture.
    • It will also ensure a higher share of farmers in the consumers’ rupee.
    • Long-term demand-driven growth: Such broad-based development in a relatively underdeveloped region of the country will lay the foundations of a long-term, demand-driven, growth of the industry in India.
    • The all India relief package of Rs 1.7 lakh crore announced by the central government earlier, which is about 0.8 per cent of the country’s GDP, is too small to reboot the economy.

    Conclusion

    If India has to bounce back quickly, it needs a much bigger relief cum stimulus package — certainly not below 5 per cent of GDP. And, it should focus more on the eastern belt, where the issue is that of survival.

    Back2Basics: Marshall Plan, 1948

    • The Marshall Plan, also known as the European Recovery Program, was a U.S. program providing aid to Western Europe following the devastation of World War II.
    • It was enacted in 1948 and provided more than $15 billion to help finance rebuilding efforts on the continent.
    • The brainchild of U.S. Secretary of State George C. Marshall, for whom it was named, it was crafted as a four-year plan to reconstruct cities, industries and infrastructure heavily damaged during the war and to remove trade barriers between European neighbours – as well as foster commerce between those countries and the United States.

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  • Contention over South China Sea

    What’s behind diplomatic tensions in the South China Sea?

    | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    In the middle of the global coronavirus pandemic, China has been busy increasing its presence in the South China Sea.

    The dispute

    • In the past few years, China has stepped up military aggression and has created artificial islands for military and economic purposes in the South China Sea.
    • This has drawn criticism from neighbouring countries and other western powers.
    • Soon after, Chinese and Australian warships also entered the fray.
    • Following the arrival of American warships, regional observers expressed concern that the US’s presence may only serve to heighten tensions.
    • The US has no territorial claims in the South China Sea but is known to send its naval force into the waters each time there are provocative developments in the waters, particularly angering China.

    Map observations in the South China Sea are must-dos for the CSE aspirants. UPSC often toggles in the Middle East,  West and Central Asian region. This year we can expect a different region for a  map-based question.

    Why in news now?

    China’s advent for islands

    • This past week, Beijing unilaterally renamed 80 islands and other geographical features in the area, drawing criticism from neighbouring countries who have also laid claim to the same territory.
    • The focus of Chinese acquisitory attention is the two disputed archipelagos of the Spratly Islands and the Paracel Islands in the middle of the South China Sea waters.
    • They lie between the territory of Vietnam and the Philippines.
    • If the dispute were to aggravate, Asia-Pacific researchers believe it could have serious consequences for diplomatic relations and stability in the region.

    What is the Spratly Islands dispute about?

    • There has been an ongoing territorial dispute between China, Taiwan, Vietnam, the Philippines, and Malaysia concerning the ownership of the Spratly Islands archipelago and nearby geographical features like corals reefs, cays etc.
    • Since 1968, these nations have engaged in varying kinds of military occupation of the islands and the surrounding waters, with the exception of Brunei, that has contained its objections to the use of its maritime waters for commercial fishing.
    • Although the Spratly Islands are largely uninhabited, there is a possibility that they may have large reserves of untapped natural resources.
    • However, due to the ongoing dispute, there have been few initiatives to explore the scale of these reserves.

    Quest for Oil

    • Over the years, US government agencies have claimed that there is little to no oil and natural gas in these islands, but these reports have done little to reduce the territorial dispute.
    • In the 1970s, oil was discovered in neighbouring islands, specifically off the coast of Palawan. This discovery ramped up territorial claims by these countries.

    What is the Paracel Islands dispute about?

    • The Paracel Islands dispute is slightly more complex. This archipelago is a collection of 130 islands and coral reefs and is located in the South China Sea, almost equidistant from China and Vietnam.
    • Beijing says that references to the Paracel Islands as a part of China sovereign territory can be found in 14th century writings from the Song Dynasty.
    • Vietnam on the other hand, says that historical texts from at least the 15th century show that the islands were a part of its territory.
    • These islands also find mention in records starting from the 16th century by explorers who led expeditions to the East.
    • Colonial powers of the French-Indochina further accelerated the tensions with regard to the Paracel Islands due to their colonial policies in the 20th century.
    • By 1954, tensions had dramatically increased between China and Vietnam over the archipelago.

    What is the most recent dispute about?

    • Recent China established new administrative districts on both Spratly and Paracel Islands.
    • It also renamed those 80 islands, reefs and other geographical features around the two archipelagos with Chinese names.
    • The last time China had unilaterally engaged in a similar initiative was in 1983 where 287 geographical features had been renamed in the disputed chain of islands.

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  • Right To Privacy

    What are the concerns around the AarogyaSetu app?

    | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    • Recently the AarogyaSetu app — for pan-India use was launched as the main contact tracing technology endorsed by the Central government.
    • Soon it became one of the most downloaded apps globally and has crossed the 75 million mark.
    • However, there are concerns for more transparency on the inner workings of an app that seeks the personal details of millions.

    RIght to Privacy is a very much contested topic for GS. The Aarogya Setu app which has a lot more to offer, is under the radar due to underlying vacuum of Privacy Law in India.

    AarogyaSetu App

    • The App enables people to assess themselves the risk of their catching the Corona Virus infection.
    • It is designed to keep track of other AarogyaSetu users that a person came in contact with and alert him or her if any of the contacts tests positive for COVID-19.
    • It achieves this using the phone’s Bluetooth and GPS capabilities.
    • Once installed in a smartphone through an easy and user-friendly process, the app detects other devices with AarogyaSetu installed that come in the proximity of that phone.
    • The app can then calculate the risk of infection based on sophisticated parameters if any of these contacts has tested positive.
    • The personal data collected by the App is encrypted using state-of-the-art technology and stays secure on the phone till it is needed for facilitating medical intervention.

    Issues with the app

    • The AarogyaSetu app faces the same issue as every other contact tracing technology that has come up during the pandemic period — it is people dependent.
    • It needs widespread usage and self-reporting to be effective.
    • Given that any number of total users will be a subset of smartphone owners in India, and there are bound to be variations in the levels of self-reporting, the efficacy is not bulletproof.
    • The terms of use of the app also say as much, distancing the government from any failure on the part of the app in correctly identifying COVID-19 patients.

    Are there privacy concerns?

    • First of all, the app exists in the privacy law vacuum that is India.
    • With no legislation that spells out in detail how the online privacy of Indians is to be protected, AarogyaSetu users have little choice but to accept the privacy policy provided by the government.
    • The policy goes into some detail on where and how long the data will be retained, but it leaves the language around who will have access to it vague.
    • As per the policy persons carrying out medical and administrative interventions necessary in relation to COVID-19” will have access to the data.
    • This suggests interdepartmental exchanges of people’s personal information and is more excessive than countries like Singapore and even Israel.

    Technical issue

    • Beyond the legal loopholes, there are technical loopholes as well.
    • The unique digital identity in AarogyaSetu is a static number, which increases the probability of identity breaches.
    • The abundance of data collected is also potentially problematic.
    • AarogyaSetu uses both Bluetooth as well as GPS reference points, which could be seen as overkill whereas other apps such as TraceTogether make do with Bluetooth.

    Other issues

    • Experts emphasise that automated contact tracing is not a panacea.
    • They caution against an over-reliance on technology where a competent human-in-the-loop system with sufficient capacity exists.

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  • Gravitational Wave Observations

    GW190412: The first merger of two black holes with unequal masses

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    For the first time since it started functioning, the gravitational wave observatories at LIGO scientific collaboration have detected a merger of two unequal-mass black holes.

    This newscard contains few basic terms that one must know-

    Gravitational waves

    General Relativity

    Black Holes

    GW190412

    • The event, dubbed GW190412, was detected nearly a year ago, and this is almost five years after the first-ever detection of gravitational-wave signals by these powerful detectors.
    • Subsequent analysis of the signal coming from the violent merger showed that it involved two black holes of unequal masses coalescing.
    • One of them was some 30 times the mass of the Sun and the other which had a mass nearly 8 times the solar mass.
    • The actual merger took place at a distance of 2.5 billion light-years away.

    Significant feature observed

    • The detected signal’s waveform has special extra features in it when it corresponds to the merger of two unequal-sized black holes as compared with a merger of equal-sized black holes.
    • These features make it possible to infer many more things about the characters such as- a more accurate determination of the distance from the event, the spin or angular momentum of the more massive black hole and the orientation of the whole event with respect to viewers on Earth.
    • While the mass of the black hole bends the space-time close to it, the spin or angular momentum of this inscrutable object drags the nearby space-time, causing it to swirl around, along with it.
    • Hence both these properties are important to estimate.

    Confirmed General Relativity

    • An Indian team consisting of researchers verified the consistency of the signal with the prediction of General Relativity.
    • The existence of higher harmonics was itself a prediction of General Relativity.

    Must refer for an easy and illustrated understanding of General Relativity-

     

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  • Innovations in Sciences, IT, Computers, Robotics and Nanotechnology

    The Curie Family and its Nobel legacy

    Prelims Only | Science Tech | Mains Paper 3: Awareness in various sc and tech fields

    This newscard is inspired by an article published in the DTE which talks about a family which has received a total of four Nobel prizes, the highest won by a single-family.

    Last year in 2019 CSP, there was a question on pure Biology about Hepatitis and its variants. With such news trending, we can expect a core chemistry or physics based question coupled with a slight Current Affairs blend.

    The ‘Nobel’ family

    • On April 20, 1902, Marie and Pierre Curie successfully isolated radioactive radium salts from pitchblende, a mineral, in a laboratory in Paris, France.
    • They were inspired by French physicist Henri Becquerel’s 1896 experiment on phosphorescence or the phenomenon that allows certain objects to glow in the dark.
    • They were able to find traces of two radioactive elements—polonium (Element 84) and radium (Element 88).
    • Curie shared the 1903 Nobel with her fellow researcher Pierre Currie and Becquerel for their combined work on radioactivity.

    Important facts

    • In 1903, Marie Curie received the Nobel Prize in Physics making her the world’s first woman to win the prize.
    • In 1911, she created history again by becoming the first woman to have won two Nobel awards.
    • The 1911 Nobel Prize in Chemistry was awarded to Marie after she managed to produce radium as a pure metal. This proved the new element’s existence beyond doubt.
    • However, this was not the last Nobel for the Curie family.
    • The 1935 Nobel in Chemistry went to Irène Curie and her husband and co-researcher Frédéric Joliot for their joint work on the artificial creation of new radioactive elements.
    • The Curies have received a total of four of Nobel prizes, the highest won by a single-family. They also have the unique distinction of having three Nobel-prize winning members in the family.

    Birth of Radioactivity

    • While delivering a lecture at the Royal Academy of Sciences in Stockholm, Sweden in 1911, Curie shared some critical details about “radioactive elements” and the phenomenon called “radioactivity”.
    • She also spoke about the chemical properties of radium, the new element that was about a million times more radioactive than uranium.
    • Radium in solid salts was about 5 million times more radioactive than an equal weight of uranium.

    Back2Basics: Radioactivity

    • Radioactivity refers to the particles which are emitted from nuclei as a result of nuclear instability.
    • It is the process by which an unstable atomic nucleus loses energy by radiation.
    • The most common types of radiation are called alpha, beta, and gamma radiation, but there are several other varieties of radioactive decay.
    • Radioactive decay rates are normally stated in terms of their half-lives, and the half-life of a given nuclear species is related to its radiation risk.
    • Examining the amounts of decay products makes possible radioactive dating.

    Its applications

    • Medical use: Many diseases such as cancer are cured by radiotherapy. Sterilization of medical instruments and food is another common application of radiation.
    • Scientific use: Alpha particles emitted from the radioisotopes are used for nuclear reactions.
    • Industrial use: Radioisotopes are used as fuel for atomic energy reactors. Also used in Carbon dating.

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  • Roads, Highways, Cargo, Air-Cargo and Logistics infrastructure – Bharatmala, LEEP, SetuBharatam, etc.

    Rohtang Pass and its location

    Prelims Only | Enviro & Biodiversity | Mains Paper 3: Infrastructure: Energy, Ports, Roads, Airports, Railways Etc.

    The Border Roads Organisation (BRO) has opened the Rohtang Pass, three weeks in advance, for transporting essential supplies and relief materials to Lahaul and Spiti districts of Himachal Pradesh.

     Rohtang Pass

    • It is a high mountain pass (elevation 3,980 m) on the eastern Pir Panjal Range of the Himalayas around 51 km from Manali.
    • It connects the Kullu Valley with the Lahaul and Spiti Valleys of Himachal Pradesh, India.
    • The pass lies on the watershed between the Chenab and Beas basins.
    • On the southern side of this pass, the Beas River emerges from underground and flows southward and on its northern side, the Chandra River, a source stream of the river Chenab, flows westward.

    Another pass in new:

    https://www.civilsdaily.com/news/sela-pass-tunnel-project/

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  • Indian Air Force Updates

    Exercise Pitch Black 2020

    Prelims Only | Security Issues | Mains Paper 3: Various Security Forces, Agencies & Their Mandates

    Australia has informed India that their premier multilateral air combat training exercise Pitch Black 2020 scheduled in July has been cancelled due to the COVID-19 situation.

    All-time generic question seeking ‘match the pairs’ can be asked from the news as such.  Click here for more exercises.

     Ex Pitch Black 2020

    • Exercise Pitch Black is a biennial warfare exercise hosted by the Royal Australian Air Force (RAAF).
    • The aim of the exercise is to practice Offensive Counter Air (OCA) and Defensive Counter Air (DCA) combat, in a simulated war environment.
    • In the last edition of Pitch Black in 2018, the IAF for the first time participated with its Su-30MKI fighters, one C-130 and one C-17 transport aircraft.
    • It provided a unique opportunity for an exchange of knowledge and experience with these nations in a dynamic warfare environment.
    • The next edition of Pitch Black is scheduled in 2022.

    India’s defence relation with Australia

    • The defence and strategic engagement with Australia have steadily gone up in recent years especially on the bilateral front with naval cooperation at the forefront.
    • The bilateral naval exercise AUSINDEX early last year saw the participation of the largest Australian contingent ever to India with over 1,000 personnel.
    • The Mutual Logistics Support Agreement (MLSA) has been long pending and is expected to be concluded soon as well as a broader maritime cooperation agreement including the Maritime Domain Awareness (MDA) to elevate the existing strategic partnership.
    • Australia recently made a pitch for trilateral cooperation among India, Australia and Indonesia to identify new ways that our three countries can collaborate to be the best possible custodians of the Indian Ocean.

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  • Coronavirus – Economic Issues

    Lockdown with a human face: Immediate focus should be on alleviating hardships of poor, vulnerable groups

    | Economics | Mains Paper 3: Indian Economy

    The article deals with the policy response to the crisis. Reducing the pain inflicted on the poor and vulnerable section should be the priority. The size and nature of the stimulus package is also discussed in the article.

    The dilemma of lives Vs. livelihood

    • As the coronavirus spreads, severe dilemmas haunt policymakers.
    • Testing of lockdown? Even the scientific community is confused and does not seem to know whether the South Korean model of more intensive testing is preferable to the European model of a complete lockdown.
    • The economic crisis that we are facing today is very different from any crisis that we have encountered recently.
    • This is the first economic crisis in recent memory to have been triggered by a non-economic factor — a pandemic.
    • A lockdown essentially amounts to limited economic activity and this results in throwing temporary workers and daily wage earners out of employment.
    • Migrant labour falls in this category.
    • According to the 2011 census, the number of migrant workers under the category, “migrants for work/employment” was 41.42 million.
    • This number must have grown substantially by now.
    • The impact of the lockdown has fallen very heavily on the poor and vulnerable groups.
    • We need to bear this in mind while evolving the strategy to combat the virus.

    Expenditure during the pandemic

    • First, medical and healthcare expenditure, which includes the money spent on extension of hospital facilities, employment of additional medical and healthcare workers, costs of testing on a much wider scale and the purchase of accessories like personal protection equipment, ventilators and testing kits.
    • The expenditure under this category is a “must” and there can be no compromise on it.
    • The length of the battle will decide the cost.
    • Second, the expenditure involved in taking care of the people thrown out of employment, and other vulnerable sections of the population.
    • Third, stimulation expenditure aimed at restarting the economy. Here, the financial system presided over by the RBI will play an important role. But the government also has a role.

    Two issues to consider while deciding on the lockdown

    • The “life” versus “livelihood” dilemma pertains to the lockdown policy.
    • A tight lockdown over an extended period may save lives by curtailing the progress of the virus.
    • But at the same time, it places several segments of society under severe hardship.
    • With the lack of economic activity, many will go hungry.
    • In this context, the government must look at two issues.
    • First, it must consider to the extent to which the lockdown can be relaxed while keeping in mind the priority of restricting the spread of the virus.
    • The government has recently announced some relaxations.
    • This is a welcome step. However, it must keep this concern under continuous consideration. It must explore other options on the medical front as well.
    • For example, will more testing make it possible to reduce restrictions?
    • Second, if the lockdown is a “compulsion”, we need to pay adequate attention to the plight of people who have been affected adversely.
    • The government had earlier announced certain measures to help some segments of society.
    • With the lockdown being extended, it is necessary to raise the levels of relief, and also cover segments of society not covered earlier — migrant labour, for example.

    The following points about the stimulus package are appearing repeatedly in most of the article on economic damage to the economy. They are also relevant from the UPSC perspective. A question based on it,  like “What steps were taken by the government to revive the Indian economy in the aftermath of the corona crisis?” can be asked.

    What should be the nature of the stimulus package?

    • There is much talk about a “stimulation package” to revive the economy.
    • The financial system will have to lead the charge.
    • Additional expenditure: Expectations regarding additional expenditures by the government vary from 2 per cent of the GDP to 5 per cent of the GDP.
    • Normal sources of financing will not be adequate to meet this order of expenditure.
    • Many analysts felt that the figure of 3.5 per cent of the GDP as the fiscal deficit, indicated in the budget for 2020-21, would be exceeded.
    • The pandemic will necessitate an increase in expenditure.
    • Moreover, with the decline in economic activity, revenues will also go down.
    • The revenue projections were made on the assumption that the nominal income growth would be 10 per cent.
    • But this is unlikely to be achieved. The nominal income growth is likely to be 7 per cent, at best.
    • Given the increase in expenditures and the slowdown in revenue collection, the borrowing programme will exceed significantly over what was indicated in the budget.
    • The monetisation of debt is inevitable and it will have its own consequences.
    • Provisions for states: The brunt of the expenditures will be borne by the state governments and therefore, the Centre must allocate additional resources to them.
    • They may also be allowed additional borrowing above 3 per cent of the state domestic product.

    What will be the overall growth rate for India?

    • In the first quarter of 2020-21, the GDP growth rate will be negative.
    • Agricultural performance during the year could be the same as in 2019-20 as the rainfall is expected to be normal.
    • The developed world may go through a recession over the year.
    • Thus the external sector may not be of much help.
    • It is quite possible for the economy to have a V-type recovery from the second quarter of 2020-21.
    • On that assumption, the overall growth rate for the year can be 3 per cent. This is an optimistic estimate.

    Conclusion

    To return to the present, the focus of the government has to be two-fold. It must act vigorously to contain the virus, explore the possible alternatives to complete lockdown. Second, it must take all actions to provide adequate help to the poor and the needy including the migrant workers. Lockdown, as necessary, must be with a human face.

     

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  • Coronavirus – Health and Governance Issues

    Public policy dilemma of choosing between lives and livelihood

    op-ed snap | Governance | Mains Paper 2: Governance, Transparency & Accountability, Citizens Charters

    This article deals with how the different sections of a society assign different weightage to the various factors they are faced with in life. In the case of Covid-19, one section of society which is well-off might care more about the possible loss of life while other section might end up attaching more weightage to the loss of livelihood than to the possible loss of life due to infection. The article discusses this issue in detail.

    Difference between risk and uncertainty

    • Since the days of Frank Knight, economists have differentiated between the two.
    • Risk has a known probability distribution.
    • For uncertainty, the probability distribution is unknwon.
    • COVID-19 makes us confront uncertainty, not risk.
    • For uncertainty, there is a subjective probability distribution, which can, and does, vary from individual to individual.

    So, how the subjective probability distribution is devised by a person?

    • Through information and experience, one already possesses.
    • There are various rationality assumptions used by economists. They are often violated.
    • Otherwise, behavioural economics wouldn’t have come into existence.
    • Typically, given a situation, when your decision doesn’t agree with someone else, you say they are being irrational.
    • However, with uncertainty, the problem may not be with rationality assumptions, but with differences in subjective probability distributions.

    Lack of data for various factors

    • Because of COVID-19, there is a certain risk of getting infected. Let’s call this the infection rate — total infections divided by the total population.
    • We don’t know this infection rate for India or for any other country for that matter.
    • No country has done universal testing.
    • No testing for random sample: No country has done universal testing for a proper random sample either.
    • The ICMR has told us more than 75 per cent of Indian patients will be asymptomatic.
    • Who do we test? Those who show symptoms, those who have been in contact with confirmed patients and those who suffer from severe respiratory diseases.
    • Most countries do something similar.
    • Sampling bias: In other words, when we work out an infection rate based on those tested, there is a sampling bias.
    • This isn’t a proper infection rate.
    • The only country where we have had something like a random sample is Iceland.
    • There, the infection rate was 0.8 per cent.
    • Data for death rate: There are similar caveats about the death rate.
    • If we mechanically divide the number of deaths by the number of confirmed cases for India, we will get a death rate just over 3 per cent.
    • The global figure is a little less than 7 per cent.
    • But neither of these is a death rate for the total population since only those with severe symptoms are included in infection numbers.
    • Three per cent or seven per cent are over-estimates.
    • In a controlled environment like Diamond Princess, death rate as a ratio of total passengers, and not those infected, was less than 0.4 per cent.
    • The true infection rate and true death rate are not alarming numbers.

    How the lack of data is reflected in subjective probability distribution?

    • There are slices in India’s population pyramid with rural/urban and other spatial differences too.
    • Consider two extreme types-type A and type B.
    • Type A, who are globalised in information access and morbidity.
    • Life expectancy is 80 plus and there are lifestyle diseases like diabetes and high blood pressure.
    • This co-morbidity increases possible death rates and thanks to globalised access to information, certainly increases perceptions about death rates, making them out to be higher than they are.
    • Some of them have fixed incomes, regardless of what happens to lockdown.
    • The high probability assigned to loss of life: In terms of maximising expected payoffs with a subjective distribution, high probability is attached to loss of life and low probability to loss of livelihood.
    • How type B forms a subjective probability?
    • Type B, someone whose life expectancy is 60, without a fixed income stream and whose health concerns are tuberculosis and water-borne diseases, not COVID-19.
    • Nor is access to information that globalised.
    • The high probability assigned to loss of livelihood: High subjective probability will be attached to loss of livelihood and low probability to death from COVID.
    • Both types reflect subjective probabilities. Neither is “irrational”.
    • The tension between the two: Type A would like the lockdown to continue indefinitely, until the long tail of the infection curve tapers off, perhaps beyond September.
    • Type B would like lockdown to be eased soon, with necessary restrictions in hotspots.
    • There is indeed tension between lives and livelihood.
    • Even if health outcomes and information access are like Type A, but income is contingent on growth, preferences might mirror Type B.

    The issues highlighted here can be broadly used in the various scenario where there is uncertainty involved and various stakeholders perceive the probable outcomes in entirely different ways. Various points here can be used to answer the question based on policy making.

    Balancing the differential individual preferences in public policy

    • One set of individuals imposes its choice on the rest.
    • Type A disproportionately influences policy.
    • This determination of aggregate preferences is a dynamic process.
    • Therefore, sooner or later, Type B contests this and as the lockdown is prolonged and livelihood costs mount, discontent surfaces, as it has across a range of countries.
    • There were also welfare economics notions that pre-dated social choice theory, such as compensation principles of Kaldor, Hicks and Scitovsky.
    • The point can be made using the two stereotypes. Specifically, Type A need to compensate Type B for their losses.
    • To state it starkly, livelihood losses suffered by Type B need to be compensated by the government through redistributive measures and this has to be financed by higher taxes imposed on Type-A.
    • The right question for the Type A is not whether they want the lockdown to continue, but whether they are willing to pay a COVID-tax to support lockdown extension.

    A question based on policy formation issues explained here can be framed, for ex. “Risk has a known probability distribution. For uncertainty, the probability distribution is unknown. COVID-19 makes us confront uncertainty, not risk. In this context, there is a debate between saving lives and saving livelihoods. In such a scenario, what can be the most probable solutions that public policy must delve into, in order to maintain the balance between this uncertainty and risk.”

    Conclusion

    Extending or ending the lockdown decision represent the public policy dilemma. Without a revival in growth, the tax-paying capacity of Type B is limited and with job losses, some Type As become Type Bs. The choice is starker.

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  • Coronavirus – Health and Governance Issues

    Stress test of leadership in pandemic

    op-ed snap | Governance | Mains Paper 2: Health & Education

    The article discusses the three stages involved in successfully dealing with the pandemic. In the next part, it goes on to explain the factors that determine the success or failure of the governments. In the last week, we read about the success story of Kerala and underlying reasons. This article is also written on similar lines.

    Stages in the pandemic response

    • Disease outbreaks, even global pandemics, are scarcely new. The playbook for dealing with them, therefore, is well understood and has been honed by practices and lessons gleaned from hard-fought battles.
    • A first stage is an early clear-eyed recognition of the incoming threat, and, in the case of COVID-19 at least, requires the unpalatable decision to lock down society.
    • Ideally, this is done with full consideration of how to support the most vulnerable members of society, especially in a country such as India, where so many survive hand-to-mouth.
    • This is a phase aimed at buying time, of flattening the epidemic curve, so that public health facilities are not overwhelmed.
    • And, for using this time, paid for by collective sacrifice, to secure the personal protective equipment (PPE) and medical supplies necessary to save lives.
    • The second phase of the pandemic response is slowly to ease the burden on the economy by permitting a measured return of business activity so that livelihoods and supply chains can be restored.
    • This stage can only be safely executed if accompanied by a war-footing expansion of testing capacity so that new infections can be identified and isolated at once, allowing contact tracing to be implemented by masses trained to do this crucial and painstaking work in communities across the country.
    • The final stage, which for COVID-19 seems a lifetime away, is a mass vaccination programme and then the full rebuilding of economic and social life.
    • None of this is easy, but, like an examination in a dreaded subject, one’s only hope is early and persistent preparation and, at crunch time, remembering the lessons learned.

    The above-mentioned stages are sort of a template that seems to have gained acceptance for dealing with the pandemic. A question based on it, like “What are the various stages involved in government’s response to deal with a pandemic?”

    Following three factors make the difference between successful and failed response

    1. Leadership problems in global politics

    • The defensive finger-pointing, opportunistic politicking and xenophobic posturing are shown by some leaders amid pandemic.
    • This is not a crisis that can be tackled without robust and multidimensional international cooperation between nations.
    • We are watching in real-time the benefits of intellectual collaboration that does not stop at national borders.
    • From the epidemiologists to the medical community identifying more effective treatments, to the research scientists racing to find a vaccine, we are benefiting from collaboration.
    • But the nationalistic turn in global politics over the past two decades has reduced investment in and undermined the legitimacy of the very institutions that facilitate international partnership at the very time they are needed most.
    • Prime Minister Narendra Modi did well to convene the leaders of the South Asian Association for Regional Cooperation (SAARC) nations in mid-March to discuss the possibility of a regional response.
    • But that video-conference call also highlighted that there have been no summit-level meetings of SAARC since 2014.
    • Similarly, United States President Donald Trump demanded that the U.S. end funding of the World Health Organization (WHO).
    • This not only endangers American lives by cutting off his own administration’s access to vital international data.
    • But also directly affects India which receives significant funding and expertise from WHO with ~10% of its overall WHO financing in 2019 coming directly from the U.S.

    2. The whole-of-the-government strategy

    • Pandemic response requires a whole-of-government strategy, for which political will and legitimate leadership are vital to convene and maintain.
    • Germany and Kerala provide two powerful though different examples of this in action.
    • In Germany, in spite of a high level of federalism that gives its States (Länder) a lot of power, Chancellor Angela Merkel’s ability to mobilise the entire system has allowed Germany to emerge as a success story in Europe.
    • In Kerala, State Chief Minister Pinarayi Vijayan convened a State response team at the earliest possible moment and has provided the full weight of his office in support of a coordinated public health strategy that has been accepted by the State’s citizens who have learned to trust the government in such situations.
    • Yet these two examples stand out in part for how rare they are.
    • Consider again the cautionary tale of the U.S. where some State Governors have yet to issue stay-at-home orders.

    3. The robust public health system

    • We are seeing first hand the consequences of starving public health systems of necessary funds and resources.
    • The comparative advantage of the private sector is efficiency; the need of the hour in pandemic response is redundancy, or, more precisely, excess capacity.
    • Most hospitals do not need invasive ventilators normally, just as they do not need vast stocks of PPE and extra intensive care units beds, but these are essential goods right now as we brace ourselves for a flood of sick patients into hospitals.
    • Watching the advanced health-care system of northern Italy buckle under the unimaginable pressures to which it was exposed over the past six weeks should be a cautionary tale for all countries that thought turning health care over to private actors was responsible governance. It is not.
    • Again, consider Kerala, which has consistently ranked at the top of State rankings for health expenditures.
    • Kerala has, a well-functioning local public health system capable of implementing the test-isolate-trace protocols critical for fighting COVID-19.

    Conclusion

    With the central role of leadership and governance underlined in the successful dealing with the pandemic, leadership across the world need to come together to coordinate at all levels in dealing with the problems that are not bound by any border.

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