Relax fiscal norms and reform the bureaucracy, writes Mark Tully
India’s health and welfare services are inadequate. This is not just because the government’s expenditure on them is low. They are also hamstrung by the stifling bureaucracy that administers them.
A global disaster of the scale of the coronavirus pandemic is leading to introspection about where we have gone wrong and the lessons we should learn. As a result, neoliberal economic principles, which were settled practices, are now being described by many economists as myths.
The need for tight fiscal discipline is a neoliberal principle that is now being challenged. It’s this economic theory that led to the dark days of austerity in Britain. Now, Rishi Sunak, Britain’s first Indian-origin chancellor of the exchequer, has found billions of pounds to spend on rescuing businesses and millions to house street sleepers, something which should have been done long ago in a prosperous country like Britain. The country’s health minister has promised that the two teams of scientists, working on producing different vaccines, can write their own cheques. In the United States, President Donald Trump has provided $2- trillion stimulus. At the time of writing, we are expecting the Indian government to announce its second economic package to alleviate the impact of the crisis.
The relaxation of fiscal discipline inevitably comes with a warning. It does not mean governments can print money when they feel the need. That would, beyond a point, lead to inflation. The money must be spent effectively on the development of productive resources and better use of existing resources. India is rich in human resources and they are underdeveloped.
This is tragically illustrated by the 27.6 million Indian children who are wasted, according to the World Health Organization. That is more than half the total number of wasted children in the world. Wasting is a symptom of severe malnutrition leading to poor physical growth and susceptibility to disease.
Another neoliberal myth that has been challenged by the pandemic is the belief that less government is better and private investment is always more productive than public. In Britain, previous Conservative Party governments undermined the National Health Service (NHS) by cutting its budget. But the present Conservative Prime Minister, Boris Johnson, was cured of a severe coronavirus infection in an NHS-run facility, not a private hospital. At their daily briefings on this crisis, his ministers paid tribute to the NHS.
India’s health and welfare services are inadequate. This is not just because the government’s expenditure on them is low. They are also hamstrung by the stifling bureaucracy that administers them. Their inadequacy is making the contribution of civil society in this crisis important.
Prime Minister Narendra Modi has called upon the civil society to join the fight against the virus, and it has taken up the challenge.
Non-government organisations (NGOs) have been, often, filling the gaps left by State schemes. For instance, there are NGOs helping sex workers and transgender community. NGOs are providing counselling sessions for women who are being abused by husbands or partners. The Delhi government and social organisations have come together to counsel those suffering from stress-induced mental health problems.
And how has civil society been rewarded? By mistrust. The home ministry has ordered NGOs that receive foreign funds to report on their coronavirus-related activities every 15 days. Imagine the waste of time this involves for overstretched NGOs. Imagine the hassle they will face from nitpicking officials. The ministry’s intervention is typical of India’s stifling bureaucracy.
Even if the government relaxes fiscal norms, unless the bureaucracy’s grip is relaxed, unless it is radically reformed, India will not learn other lessons from the pandemic and design a new paradigm of its own to replace the outdated neoliberal myths.