The Coronavirus pandemic has led several governments to curtail ‘non-essential’ business and commercial activities. The Indian government’s decision to enforce lockdown with a heavy hand is not unique. But the negative impact of the lockdown can be mitigated.
The current Indian government has a poor track record of policies like demonetisation, and hastily implemented Goods-and-Services Tax (GST). To break the trend, the government needs to forgo the top-down approach in specific ways.
The decision by Prime Minister Mr Modi seems to have taken the states unawares. The move to invite states in the process is a step in the right direction. But more can be done.
On 24th March, the Indian government imposed a 21-day complete lockdown. To be fair, no government wants to be responsible for tens of thousands of deaths because they did ‘nothing.’
However, the clampdown has been oppressive. Just in the Indian capital city of Delhi, the police have detained over 3,500 people for lockdown violations. And there have been widespread reports of unreasonable measures to enforce the curfew. Media reports denouncing minor violations are making things worse.
About one-third of the 1.3 billion Indians are employed in the service sector with a large chunk in the unorganised sector. But they can innovate while still maintaining social-distance. To see what that would look like, consider the response of some private sector firms.
Grocery delivery platforms are using Swiggy and Zomato to ensure grocery gets delivered while ensuring that both the deliverers and the customers are safe from person-to-person contagion. The private sector will respond faster than the government in coming up with initiatives that meet the needs of people. And that without increasing the risk of spreading the virus. So such efforts are to be lauded.
The economist Fredrick Hayek argued that the knowledge about the circumstance of time and place is dispersed among individuals. For instance, a person knows what they are willing to pay for a meal; a restaurant knows how much they can charge for it to stay in business. Similarly, the local Kirana(General) store owner can keep only the essential grocery items that people in that neighbourhood purchase. So the central planner will be inefficient in allocating resources.
Differently, the private sector has both the information and the incentives to operate within the given constraints. Swiggy will deliver food at the door-step to abide by the social distancing mandates while meeting the needs of customers – some of who may be doctors with little time to cook.
The government must communicate the law with regard to the outcome they seek, i.e. social-distance rather than prohibiting movement per se. Individuals as consumers and producers care about their lives and that of their family. So they will not seek to violate social-distancing norms. Moreover, law-flouting private companies will face the customers’ wrath.
Just as the private sector can find innovative ways to provide services while continuing to maintain social distance, daily-wage earners can operate in a reasonably constrained environment.
Consequently, the closer is the law-maker to the individual, lesser will be the impact of the lockdown. Some states are delegating the care of citizens to the most local governing body (the panchayat). This is much better than the Centre restricting movement.
Even if charity is the objective, individual response is likely to meet the needs better than the government. For instance, one person in Delhi has been feeding tens of thousands of daily-wage workers while the recipients and distributers maintain safe-distance.
Individuals can be allowed to move out as long as the requisite social distance is maintained. Transport vehicles should be allowed to ply with all kinds of goods. Any goods vehicle with numerous people can be penalised, say by revoking their license. And the local government can figure out these details.
If a family is without food, it is unrealistic and even cruel to expect them to uphold the rule to stay indoors. Police and officials need not waste time asking why people are out; they merely need to ensure that the distance is maintained. The impact of a complete lockdown is and will be devastating. Though not attributable to COVID-19, lack of daily earning will affect health and mortality. It need not be so.