G’nY: Do you believe that India’s lockdown has been timely but tad unplanned–especially in view of the public policy needs?
Of course, it has been unplanned! Who could have planned this? Could it have been done better? Probably not, as the government has limited abilities in the best of times. Also, there are few people in the government who have such expertise, fewer who take the responsibility and still fewer who have the confidence in the leadership to take action. Given the lack of capability, we could not have had a better lockdown. However, going forward we need to invest in three things–more capable people, more efficient administrative mechanisms and greater trust and accountability across all hierarchies in the government. The challenges ahead are more difficult than the ones we are facing now.
G’nY: Which sectors of the Indian economy do you think will be worst hit by the lockdown?
All, at different times. Hospitality is already dead, which will be followed by transport and real estate. Finance and banking would tumble and then consumer durables. This would be followed by automobiles and finally at the end of the spectrum agriculture would be affected due to the lack of purchases, which would then loop back into loss of demand for fast moving consumer goods (FMCG). There will be an all round slowdown. Very small sectors that seem to be doing well will also be affected in the longer term due to slower long term growth. When economic growth falls as drastically as this, everyone will suffer, if not now, then later. If not in the form of falling revenues and bottom lines then at least in falling growth.
G’nY: What kind of economic activities do you think should be allowed. For instance, do think site specific work, where workers are onsite, should continue?
All economic activities need to be allowed. Only practices related to touch and interaction will need to change in all occupations. The solution to Covid19 is at least 18 months away. We cannot be under lockdown till then. In fact, the economic lockdown may end up creating more morbidity and mortality than we can even imagine.
G’nY: What are your views on a new sustainability based global economic order in the post Covid-19 scenario? For instance do you think that there should be sustainability considerations imposed on luxury products and curbs on non-essential consumption?
I do not believe in curbs on consumption or on specific products, as that only leads to people finding alternatives which sometimes are worse. The way to deal with this is through prices and through the removal of unnecessary benefits. For a first we need to ramp up the prices of fossil energy through mechanisms such as carbon taxes. We need to tax all private transport and not provide incentives such as the depreciation of vehicles or free/cheap parking in public places. Secondly, we need to stop subsidising fertilizers, water and electricity for high yielding variety (HYV) agriculture that both leads to overproduction and ecological destruction while not helping the small farmer. And finally, we need to plan our cities better so that people are motivated to follow the walk-public transport-walk model and not use private transport.
G’nY: Do you think local district-based economies and intra-state trade should be revived as opposed to huge global economies with wealth concentrations in few hands? Or do you think it would be a step backwards?
Some may call it a step forward or sideways or backward, it does not matter. A step forward towards a massive ditch ahead is worse than a step sideways or even backward. The point is this economic structure is not working. It is leading to increasing inequalities, flat wages for the poorest segments globally, rising concentration of power, massive environmental damage. In India, it is also not delivering the rise in employment required. Moreover, stress and mental health are being compromised everywhere. The new model that many of us including I dream of, does have elements of globalisation, but it will be largely local.
I believe that we can achieve this simply through costlier fossil energy and transport and better urban planning. We should let all trade be free including within the country. Note this, the more controls we impose, the more we harm the local economy. Government controls eventually help large globalised conglomerates and harm small entrepreneurs, even if they are meant to help the latter.