What has gone right and what has gone wrong for India so far

The government is definitely on the cautious side, for now. Half a world away, the Americans are having the same exact fight. Their government is treading on the reckless side of things.

This is a difficult situation with no real good choices. If you ask me, I was hoping for a bit more relaxation of things come May 3. In the last few days, there was nothing happening that was too alarming. India had been stuck in a rut around the 6-8% daily growth range. In the last two days, it had come down to around 5%. So I was actually feeling rather confident. And I could not help feel disappointed when I saw the announcements yesterday.

Then, I went to sleep. I woke up and checked covid19india.org, which is the first thing I do every morning now.

2391 cases yesterday. OUCH!

And just like that, we are back to the near 7%.

While 5% to 7% may not seem like a lot, let me show you the difference it makes to doubling times.

(1.07)^(10.5)= 2.007…

(1.05)^(14.3)=2.009…

(1.03)^(23.4)=1.997…

So, at 7%, you get just over 10 days. At 5%, it’s roughly 2 weeks, or 14 days. At 3%, you get nearly 24 days!

Let’s just hope yesterday was an aberration.

First let us talk about what has gone right for India. Around the beginning of the month, India was treading on a terrifying 20%+ daily growth rate. That’s a doubling time of less than 4 days.  We were a week or two away from turning into Italy. If we hadn’t done the lockdown, the country could have collapsed. On the good side, BBC would be so delighted they would have announced a $1000 bonus for every employee, overground or underground.

The other thing that has gone very very well for India is the near absence of community transmission. I say near absence because we cannot know for 100% certain. But the rate of positives establishes beyond doubt that the situation is not out of control.

India has now conducted 902654 tests. We have found 37360 positives, or just 4.1%. The argument about India not testing enough has worn thin. Nearly 1 million cannot be a small sample. Further, this figure of 4% has been remarkably stable for the last month. When India had done less than 1 lakh tests, the rate of positives was about 3.5%. Now, it is 4%. In fact, the 4% figure has not changed even for a day since Apr 10 or so. When a statistic is that robust, you have to believe it.

What it tells you is that India has ramped up its testing protocol and number of tests *exactly* in sync with the spread of the disease. The ICMR has done something very very right.

You must have heard detractors crying about tests per million. Let me illustrate with simple example why they are wrong.

Suppose you are tasked to find the level of customer satisfaction with Howrah Delhi Rajdhani Express. You take a sample of people who have traveled on the route and ask them to rate the performance of the train.

Liberal : That’s not enough. Your sample is too small compared to India’s population.

Do you see how silly this is? Why does India’s population matter here? Why would you ask random people in Kanyakumari about the Delhi-Howrah Rajdhani express? You should go to Howrah Station. You should ask people on the big stations along the way, such as Patna or Prayagraj.  Like the Rajdhani express, the disease also spreads in vectors and accumulates in clusters.

Now, let us come to what is going wrong. On the one hand, the absolute number of cases is increasing, even though the percentage may be going down. Yes, as far as the mathematical model is concerned, only the growth rate matters, not the absolute numbers. But the absolute numbers matter when it comes to allocating things like hospital beds, ventilators, PPE kits for personnel and the like. And at a basic level, doctors and nurses to attend to the patients! We simply do not have the resources to handle an Italy like outbreak. We need to cut the disease off with far lower numbers.

As of now, we haven’t run out of things like hospital beds. Not even close. But if this nagging 6-8% rate continues for another month, we will get there.

What else is going wrong? Pretty much everything on the economic front. Large corporations have mostly announced pay cuts and hiring freezes. I’m sure the mid level enterprises have done pretty much the same and the small businesses are on their last legs. The snowball effect will build up in no time : those entering the workforce have literally nowhere to go. The ones already in the workforce will have to spend less because their pay has been cut. As they spend less, the consumer economy shrinks even further and more jobs are shed.

A stimulus? YES!

I don’t believe in the expression “No atheists in foxholes.” However, I do believe there are no libertarians in a global recession. This is basically me taking a jibe at myself 🙂

Notice that the government did not release the monthly GST collections this Friday May 1, which suggests the possibility that these numbers could be shocking. Well, maybe not shocking. We are all expecting a shock. More like terrifying.

And now we have to have a stimulus, which is a case of having to spend money the government doesn’t have. Meanwhile, there is talk of a $60 billion stimulus. Rating agencies are circling around, looking to downgrade. Gosh…what a mess!

The only way perhaps is a stimulus that is totally out of the box. We take a big risk, roll out big money in the stimulus, literally going for broke. And we announce huge incentives for companies wishing to shift manufacturing out of China. The advantage of a crisis is that the Center is now empowered to take extreme measures without the ambient political noise. We ride rough over pesky land and labor laws across states, push through ordinances. If these get challenged in the courts, let them. The courts are barely open anyway and if needed, the govt can pass them as money bills later on. We can turn Coronavirus into an opportunity to create a whole new industrial base for India.

7 thoughts on “What has gone right and what has gone wrong for India so far

  1. I am not in a position to comment on what measures should be taken on economic front. Evidently it needs nerves of steel and lightning execution, which in all probability cannot be expected from this government overly dependent on Babus.

    However, there is a question I have been meaning to ask on the health aspects and today is as good a day as any other.
    Some days ago, I read a scary article https://medium.com/@drhassaballa/what-ive-learned-treating-patients-suffering-from-covid-19-41adc282e973
    It is written by a doctor who says that Covid is unprecedented and highly unpredictable in his/her career as a critical care medicine specialist. There can be “frighteningly quick deterioration” and being on a ventilator, unlike what most people think, can cause lung damage and is supposed to be the last thing to be tried normally.
    In other words, it looks like a very big deal. In all probability we Indians may be more resilient and may have a much less virulent strain of Covid. But somehow, after reading this article it looks to be not the kind of disease like Chicken Pox that people can be okay getting exposed in the hope of developing life-time immunity against it or having a powerful immune system so as not to fall ill. What if your body is not strong enough to fight the disease – in which case it can be fatal? In any case, it would be straining the resources of health care, which may be denied to more needy people.
    So, I am not sure how lockdown can be lifted, given that single source has already jeopardised lockdown 1 and 2, and their pervasiveness throughout the supply chain and given that govt and law enforcement have been unable to completely seal their areas.

    I have also read twitter threads like below –

    – about people getting this disease through perfectly healthy carriers and it is impossible to filter out healthy carriers. Eg – What if my maid is completely healthy herself and has a strong immunity but she is a carrier?

    PS – I am a patient of an autoimmune neuromuscular disease called myasthenia gravis – and my medication consists of immuno-suppressants. Although I have not read anything specifically about the vulnerability of patients of this kind of disease to Covid, I think it is logical that I may be at greater risk than others, even though I am 41 years old – i.e. not elderly.

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    1. Here is an article that suggests using oximeters can detect Covid-19 symptoms earlier.

      After reading this, have started measuring my oxygen levels daily.

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      1. Kannan ji,
        I won’t desist you from doing what you think is right but I would still caution all members against going too far in these times of “corona – scare”
        However, on medical side of things, I would advise a healthy portion of fruits in your daily diet along with multivitamin supplements, specially vitamin C.

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    2. Yes madam, theoretically patients on immunosuppressive medications may be at a higher risk. However, it is still a general statement as the dose, duration of medication along with performance status of the patient are among various factors that determine the immune status of a patient.
      Nevertheless ,caution is advised, which is already being practised, I presume.

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  2. The Modi government is in a tight spot. It allowed the bureaucracy to stifle growth in the first six years. Now it faces the challenge of reviving growth.

    As you rightly point out, fiscal stimulus is a road to nowhere because the rating agencies will quickly junk Indian government bonds and after that borrowing from international markets will be difficult. We are not like the US which can print dollars without care.Also in such a situation, the smart money will simply move to gold and get locked there making the revival difficult.

    Nirmala Sitharamans usual tricks of 2% more tax and 5% more cess also will not work, the taxpayer will just move out to countries like Singapore. BTW, Congress did fiscal stimulus during the 2008 recession and wrecked the economy with super inflation.

    The only way out is to appeal to people to donate. But trust between people and government is already low because the government wastes Hindu money on getting minority votes. Governments have looted temples and given it to secular causes – so the Hindu is not going to donate to the government. Looting temples is a bad habit that all state governments and the central government has acquired and the lack of trust because of this is going to affect revival.

    This is the right time for State governments to become Dharmic and free up temples. This will motivate people to donate to temples and see the effects of that in their locality. Unless those who can open their purses do so willingly, this crisis will be difficult to tide.

    If Modi government continues on the usual socialist route, the situation will become grim and Modi/BJP will face anger of the people at the polls. This is a golden opportunity to shake off the Adharma of 70 years and take the dharmic route. And become a society that is based on true secularism, trust and concern for fellow citizens.

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  3. I will comment on the last paragraphs concerning the economy. I am increasingly of the belief, echoing some folks like Mohandas Pai, V. Anantha Nageswaran, and R. Jagannathan – all of whom have written some very cogent articles on Swarajya – that the time has come for this government to undertake extremely radical reforms.

    This is not the time to be cautious: about the fiscal deficit, about inflation, about ratings, etc. Holding on to a 3.5% fiscal deficit metric is fine for normal times and this, assuredly, is not normal times. It is also the time to think strategic, think very long term, and think of maximizing opportunity. If that means a 8% or 9% deficit, so be it.

    But it should be backed up very defined plans for radical reforms, and these include reforming agriculture (eg: do away with APMCs), industry (eg: very special status for new manufacturing units in the hinterland, not urban centers), services (eg: huge benefits for SMEs on the one hand and large companies who should be made to open new greenfield centers in Tier-2 and Tier-3 towns). Finally, a huge fillip to the self-employed by making large companies such as Reliance Jio, ITC, Amazon, Flipkart, etc to enable digital pathways for them to gainfully participate in the economy while providing distributed employment. The last is already beginning to happen but should be instituted in law.

    Let the government rope in Japan, which has been in the doldrums for 15 years and now faces an even graver problem, have their mega corporations invest hugely at Japanese government funded 0% loans: in railways, port infrastructure, highways, manufacturing, electronics…India should aim to secure $100 billion in 0% or 1% loans with extremely long tenures but give their companies a way to relocate out of China. When India’s exposure to such loans is extremely limited, there should be no political opposition, especially if the argument is not just to lift the economy but to make it world class in a defined period.

    On another front to give a huge fillip to the above, there should be an order-of-magnitude increase in infrastructure spending with a goal to level up to China’s in 10 years – in ports, rail, highways, waterways, airways, and energy. India need not copy China in building huge, image-building, skyscrapers that are mostly wasteful but focus on building a world class and unbeatable infrastructure that lubricates a high functioning economy.

    Taking advantage of this unique, once-in-a-lifetime opportunity presented by the Wuhan Coronavirus, the government’s economic goal should be nothing short of a First World economy in 10 years’ time. No graduated stimulus here, stimulus there. In other words, hit the ball clear outta the park.

    To repeat Abhishek here, this should be India’s own New Deal. It could call it the 21st Century Deal.

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  4. There is some strange news floating around the world. NY Times reports that after a person gets infected, it takes four to six days before the person starts showing the symptoms yet he continues to spread the virus from day one. Another strange news is from a county in California where some 800 people are tested positive for COVID-19, but in the same county, 200000 people tested positive for antibodies in their bodies indicating a much wider spread of the virus.

    India will have lot of time to learn from various countries in Europe, North, and South America because many if not all will open up before India will be ready to open up.

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