2020-07-15 21:59:00
Pandemic

New Delhi: A pandemic is not the right time to overhaul the country’s massive welfare system and setting long term priorities based on experience of a few months may not be wise, according to a government official.

Expenditure secretary T V Somanathan said at a webinar on Wednesday that it would be a mistake to reorient the entire welfare system, especially the healthcare system, based on the experience of four months of the coronavirus pandemic. “Deciding the healthcare priorities based on these four months will be wrong. Are hospital beds and intensive care units the long term priorities? We have not decided these are the long term priorities. These are short term priorities, necessarily not a long-term priority,” said Somanathan.

Somanathan also said that the case for a universal basic income (UBI) should not be linked to the pandemic. The government had used cash transfers and free food grain supplies as means for alleviating the hardships of people who lost livelihoods during the pandemic.

“During a pandemic, governments are expected to respond by giving something more than you already have. The case for a UBI must stand or fall on its own without a link to incidents like a pandemic,” Somanathan said, adding that UBI was not going to be an answer to a pandemic.

“Even if we had a substantial UBI, during a pandemic, you would have had to do something more,” he said. This, he added, was true even in the case countries with stronger welfare measures. “If you have got something more to do (during the pandemic), then the higher the starting point, the lesser the fiscal room,” he said.

Somanathan also sought to clarify the government’s position on suggestions from the industry and economists that India could spend more in offering a fiscal stimulus and the resultant economic growth will help make up for the higher fiscal deficit. He said that while the higher spending would be a known and quantified figure, any increase economic growth was probabilistic. “It (the economic growth) is in the eye of the beholder,” he said.

The conference organised by the National Council of Applied Economic Research (NCAER) sought to find what were the learnings from the coronavirus pandemic and India’s economic shutdowns about meeting the country’s safety net challenges.

Somanathan was responding to suggestions from economist and Nobel laureate Abhijit Banerjee that India should recast its welfare system. Banerjee said that although we are using the National Rural Employment Guarantee Scheme as a short-term response to the pandemic, one should know that NREGA was not designed for offering an emergency response in a crisis. “I think we need to redesign the entire welfare system. That is another task. In the short run, the government should loosen purse strings,” Banerjee said.

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