The phrase “Annus Horribilis” pre-dates Queen Elizabeth-II, but it was certainly popularised by her in 1992, when the royal family faced a particularly difficult year. Queen Elizabeth-II said, “1992 is not a year on which I shall look back with undiluted pleasure. In the words of one of my more sympathetic correspondents, it has turned out to be an annus horribilis.” Several years later, in 2004, Kofi Annan, then UN Secretary General, said, “There’s no doubt that this has been a particularly difficult year, and I am relieved that this annus horribilis is coming to an end.” These were two individuals, caught in their own individual problems. But for the entire world, 2020 has been a horrible year.
For opticians, 2020 represents perfect vision. The year 2020 was anything but that. This is because of Covid, the worst pandemic the world has witnessed since the Spanish Flu in 1918-20. As of now, 80 million people have been infected by Covid, at least in terms of detected cases, and 1.7 million have died. The Spanish Flu had worse numbers, infections, as well as deaths. However, Covid is not yet over, with newer strains and mutations being discovered. The efficacy of a vaccine is still in doubt, not to speak of side-effects yet unknown. Had vaccines been that effective for a virus, we would have had a vaccine against influenza by now. More importantly, nowhere in the world are medical treatment and healthcare what they were one hundred years ago. Therefore, the Covid numbers, with more coming in, are devastating. Culpability vests with China, a culpability the country has not yet answered for.
For India too, President Donald Trump’s visit, cyclones like Amphan and Nisarga, Ayodhya or National Education Policy have faded from public memory, though freeing up of agriculture remains topical. With the economy recovering and Union Budget imminent, there is some interest in economic matters. However, the bulk of conversation is still about Covid and “Unlockdown”. It hit us on 30 January 2020, a date known for another tragic event too. That’s the day when we had the first confirmed case of Covid. Every instance of a pandemic has been linked to cross-border movements of people, ever since plagues figured in recorded history. It was no different with Covid. Had India been a closed country, with no immigration of any sort, we would have had no Covid, though a few cases of the Wuhan virus might have slinked in through land borders. When any government takes a decision, it is an ex ante decision, based on imperfect information. Ex post, with benefit of better information, it is always possible to criticise a decision. As a counter-factual, had the Union government clamped down on flights in mid-January, India would have been ravaged less. But at that point, little was known and China’s veil of secrecy prevented transparent flow of information.
There is a difference between a pandemic and an epidemic, defined by the scale of spread. Covid is technically a pandemic, not an epidemic. The WHO has told us that. But let’s ignore this fine difference. We are still caught in the tangle of an antiquated Epidemic Diseases Act of 1897. The fact of the matter is that we have no proper law, setting out responsibilities of Union, state and local government, when confronted with a pandemic. There is a Disaster Management Act of 2005, but it has no teeth. So far as the Epidemic Diseases Act is concerned, under Section 2A, except for action taken at the border (seaports and airports), there is nothing that Union government can do. We loosely use expressions like Lockdown (first introduced on 25 March) and Unlockdown (introduced on 1 June), without realising that there is no clarity on which layer of government introduces either. Without digressing too much, let me mention the Third Report of the 2nd Administrative Reforms Commission, dated September 2006, which has all the details. Stated simply, we have no satisfactory legislation to deal with pandemics, or disasters in general. We didn’t have it while reacting to Covid. Perhaps Covid will trigger the thought that we do need such clarity and legislation.
Covid-19 caught the entire world, not just India unawares. With India’s population, it is not surprising that the number of infections should be high. In 1968, there was an exhibition of Andy Warhol’s works at Moderna Museet in Stockholm. On that occasion, Andy Warhol remarked, “In the future, everyone will be world-famous for 15 minutes.” Covid-19, with its uncertainty, brought fleeting and dubious fame to several people, for more than fifteen minutes. Between 18 March and 21 March 2020, Dr Ramanan Laxminarayan, Director of the Center for Disease Dynamics, Economics and Policy, projected that India would have 700 to 800 million infections and 2 to 2.5 million dead. This was one extreme. At the other extreme, a model presented by a member of Niti Aayog projected there would be no new cases after 16 May 2020. Both extremes, the excessively pessimistic and the excessively optimistic, were wrong and the fame lasted no more than the fleeting fifteen minutes.
In the jargon used by economists, there is a difference between risk and uncertainty. In the case of risk, the probabilities of events are known. In the case of uncertainty, probabilities are unknown and this makes decision-making difficult. Uncertainty also makes modelling difficult and in the absence of data, values of variables imported from other countries often lead, and have led, to fallacious results. In that state of uncertainty, the Union government imposed a lockdown on 25 March 2020. In various phases, the lockdown lasted till 31 May 2020 and from 1 June 2020, given the need to revive livelihoods and the economy, there has been a staggered process of un-lockdown.
There are different metrics to evaluate the spread of the pandemic in India. We have 10 million cases and the number of people who died is short of 150,000. Normalised by population, regardless of the metric used, India’s policy response has been remarkably successful, compared to many other countries that are more advanced. But there is a point one should flag. A pandemic is about mortality and morbidity, capturing the requisite data on both and evolving suitable policy responses. If general data on deaths are faulty, specific data on Covid-related deaths are also likely to be deficient. Vital statistics mean data on births, death, marriages and divorces. Today, in most countries in the world, including India, this is done through a civil registration system (CRS). The legislative support for this is provided through the Registration of Births and Deaths Act of 1969, which requires mandatory registration of births and deaths. And 25% of deaths were simply not registered, with some variation across states. Given this, does one expect all Covid-related deaths to be reported and registered? That sound’s unlikely. Reporting and registering death is one thing. Ascribing the cause of death is another. There is a process for medical certification of cause of death (MCCD). The latest report, published in 2020, reports figures for 2018 and shows how unsatisfactory the system is. By no means is this a problem caused by Covid. But Covid flags the inadequacies very starkly, as it underlines frailties in health-care delivery and governance, with significant variations between states.
However, it is also true that without government interventions since 2014, India would have fared worse under Covid, although at one level, this remains a counter-factual argument. Without getting into details, as that will be too much of a digression, examples of such interventions are MGNREGA, Pradhan Mantri Jan-Dhan Yojana, National Social Assistance Programme, Housing for All, Saubhagya, Pradhan Mantri Jan Arogya Yojana, Ayushman Bharat, Swachh Bharat Abhiyan, DBT and Aadhaar. Rural India was relatively insulated from both Covid and lockdown. But, in addition, rural India has benefited more from public welfare schemes, facilitated by SECC (rural) being more robust than SECC (urban). For rural India, there has been a better and easier matching of household identification (such as in MGNREGA and SECC) with individual identification (such as in Ayushman Bharat and Aadhaar). If there was a problem with urban migrants returning to rural India, that was largely because the identification requirement of the Inter-State Migrant Workmen Act of 1979 was never implemented, and welfare benefits lacked portability.
Since 2017-18, the Indian economy has been in the midst of a slowdown and Covid accentuated that trend. As long as there was a lockdown, constraining economic activity, growth was bound to suffer. A lot was made of the sharp negative growth in Q1 of 2020-21. As the Q2 numbers highlight, there was no need for all that gloom and doom. Barring a few sectors, there has been broad-based recovery in Q2. While 2020-21 will certainly end with a negative real rate of growth, 2021-22 promises to be better. No doubt that the imminent Budget will reinforce the reforms the Union government has already introduced to put Covid behind us and take India to a higher growth trajectory.
Bibek Debroy is the Chairman of the PM’s Economic Council. The views expressed are personal.
