“Businesses could take a year to recover from losses due to COVID-19”

Dr Arpita Mukherjee, Professor, Indian Council for Research on International Economic Relations (ICRIER) speaks to TPCI about the impact of COVID-19 on the Indian economy, and how the health infrastructure should be primed for such events in future.

TPCI: How do you see India’s current preparedness for the Covid-19 pandemic, given the initiatives being taken around the world?

Dr Arpita Mukherjee: No country is prepared for the Covid-19 pandemic . India has taken the necessary steps like lockdown pretty fast, which will help to reduce the spread. Our healthcare infrastructure is weak and good quality care is in the private sector. Given that even developed countries are struggling, with a large population this is  a matter of grave concern.

It is also important to note that India has a fragmented and poor supply chain for essential commodities. The e-commerce companies are unable to cater to orders and India has not allowed an inventory based e-commerce model. A market-place based model fails during a sudden surge in demand. Therefore, people have to go out of home to buy essential commodities. This increases the risk of spread of the virus. This is the right time to relook at our policies related to efficient supply chains. The Department of Commerce may seriously look at the e-commerce policy.  Further, in many cases, websites of e-commerce companies clearly state that while government has not stopped distribution of essential commodities, local authorities are not allowing them entry.  This is a clear case of lack of policy guidelines and publicity of dos and don’ts  through circulars, media, etc.

Large part of Indian businesses are small and medium enterprises and many are in the informal sector on a daily wage earning basis. The social protection system is India is weak and in a pandemic situation there will be few gainers and many losers.  Each state will take its own decisions.

Those who are hoarding essential commodities may make money but there is no system of identifying and punishing them. This is again related to a lack of a good supply chain infrastructure.

A number of businesses will face huge losses which will take them more than a year to recover, since the Indian economy is already experiencing a slow GDP growth. The late filing of taxes may not help.    

TPCI: While the lockdown has been praised, how successful can it be in containing the virus? Do you feel the lockdown may need to be extended?

Dr Arpita Mukherjee: The lockdown is the only way to reduce the spread of the virus. The lockdown has been extended by the Prime Minister on March 24  to 21 days and this is the right move. While I strongly support the lockdown, I do have serious concerns about not having proper policies in place to address a pandemic situation. Policies cannot always be reactive to events, they have to be forward looking. For example, India has faced a number of natural disasters and hence we should have policies that would ensure essential supply of goods at your door step in case of any pandemic. 

TPCI: What specific measures, according to you, can be taken in addition, to ensure that India can contain the spread and fatalities from this pandemic in the coming days?

Dr Arpita Mukherjee: Apart from lockdown, it is important to track patients using IT tools,  ensure supply of essential commodities, connect primary health care facilities with It infrastructure, regularly collect patients data and analyse them, increase testing and engage the private sector.  

TPCI: In terms of the health infrastructure available within the country, how prepared is it for the emerging situation?

Dr Arpita Mukherjee: Our health infrastructure is weak and NITI Aayog 2019 study also confirmed that majority of good quality healthcare is in the private sector. In the past few years, there are concerns raised by the private sector about government fixing the rates of treatment, stents, etc., which has adversely affected them. The government needs to upgrade its own health care quality and allow the private sector business flexibility so that they join hands with the government in pandemic situations. 

Most of the CSR funds of companies are used in publicity and campaigns. If even 30% of such funds were used to upgrade social sectors like health it will help a lot of Indians. Each Member of Parliament is allocated a fund for his/her constituency. At least 30% should be allocated to health care and 10% to research and analysis. 

We have done deep survey based research and have shared our findings in multiple forums  on how to improve the health care infrastructure leveraging on our strength in high quality manpower and technology. While the current situation needs immediate solutions, we need to plan for the future.

TPCI: What suggestions would you like to give in order to address the shortfall in health infrastructure, given India’s unique strengths and constraints?

Dr Arpita Mukherjee: A number of studies have been done by researchers like me, NITI Aayog and others which clearly outline the gaps in healthcare infrastructure. India’s strengths are in high quality manpower, technology and traditional medicine. If one looks at technology, it is presently being used for activities like creating dashboards on COVID-19. How many Indian hospitals have implemented Electronic Health Recording for outpatients? How many primary health care centers are computerized?  If one looks at traditional medicine, are there any studies on how India can get the traditional medicines approved and export them? What are the views of the patients post-treatment? Have there been any survey of patients? Do we know whether there are any research on trials under alternative medicine for COVID-19?

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Dr Arpita Mukherjee is a Professor at ICRIER. She has several years of experience in policy-oriented research, working closely with the Government of India and policymakers in the EU, US, ASEAN and in East Asian countries. She has conducted studies for international organizations such as ADB, ADBI, ASEAN Secretariat, FCO (UK), Italian Trade Commission, Konrad-Adenauer Stiftung (KAS), OECD, Taipei Economic and Cultural Centre (TECC), UNCTAD and the WTO and Indian industry associations such as NASSCOM, FICCI, IBA, IDSA and EICI. Her research is a key contributor to India’s negotiating strategies in the WTO and bilateral agreements. The views expressed here are her own.