Mr Prime Minister, good economics and the welfare of the people are always good politics.
If you follow my advice, you will be enthusiastically rewarded come election time.
If you fail, history will hold you responsible, warns Kalyan Singhal.
Had the government followed my advice then, it would have substantially mitigated the current appalling crisis.
1. The first priority is to control the virus.
The second is to ensure that no one starves.
The third is to save the economy from a deep recession.
2. The government should give every adult and child under sixty years of age a monthly grant of 2,000 rupees and everyone over sixty a monthly grant of 4,000 rupees until the crisis is over.
These grants would cost three trillion rupees (three lakh crore rupees) per month (about 1.5 percent of GDP).
3. The government should purchase all available food grains from the current harvest. It should distribute the grains from these purchases and from its own huge buffer stocks to the entire population for free.
4. The government should finance these desperately needed steps through a combination of printing money and budget deficit.
With the money supply plummeting, printing money will not risk driving inflation. Indeed, it will help the economy bounce back when the lockdown is lifted.
5. The government should mobilise rural healthcare and expand telemedicine to remote areas. India's medical infrastructure is not equipped to deal with the magnitude of the rapidly developing crisis.
As soon as possible, the government should build makeshift hospitals in regions that do not have adequate facilities.
DRDO (the Defense Research and Development Organisation) and similar organisations can contribute by designing partially prefabricated hospitals, while private and public sector companies can start to manufacture parts.
This process will take time, but as the crisis drags on, could still help. Moreover, it will leave the country better prepared for future health crises.
- Do not listen to textbook advice on economics. Such advice is for normal times. These are not normal times.
- Discontinue all travel to and from abroad.
- Lock down the country completely except for supply chains for essential services, including food, electricity and gas, and healthcare.
- Lift the lockdown only after COVID-19 has disappeared almost entirely and nearly all Indians have been vaccinated. The economy will rebound swiftly and readily after those goals have been achieved.
- Provide immediately free transportation to migrant workers wanting to go home.
- No individual should have to pay for the vaccine.
Mr Prime Minister, good economics and the welfare of the people are always good politics. If you follow my advice, you will be enthusiastically rewarded come election time. If you fail, history will hold you responsible.
Copyright, Kalyan Singhal.
Kalyan Singhal is the McCurdy Professor of Business at the University of Baltimore.
Since 1992, he has edited Production and Operations Management, one of the top 20 business journals on the BusinessWeek list.
He recently founded Management and Business Review, a journal for executives supported by leading business schools.
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