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.
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.