A recent article in the Guardian raises important questions about how governments across the globe re-imagine the post SARS-CoV2 Without a definitive treatment and hopes of vaccines still at least a year away, we need to acclimatize to the virus; lockdowns cannot span months together. The debilitating effects of shutting down the economy, especially in a country like India where there are crores of daily wage workers and an even higher number in the informal sector, is a glaring reason why we need to start thinking about how to "live with the virus".
While the article focuses on issues that seem to be endemic to the developed world, there are big parallels for India. With the 20 lakh crore economic package announcements underway by Union Finance Minister Nirmala Sitharaman, the parallels are thrust right in the spotlight.
In good taste or in haste?
Firstly,
let us examine the question of privatisation. The government has deemed it the
right time to privatise operations of essential infrastructure like power
distribution and airports, among others. Though the nuances of the
announcements are yet to come to light, the long drawn question of categorical
influence of private companies in everyday public affairs begs to be raised.
It is
widely believed that privatisation would lead to better efficiencies and
optimizations. Shouldn’t the question be why can’t state controlled
organizations be just as efficient, if not better equipped with the backing of
the state?
While of
course, privatisation of the vast many public sector undertakings is sure to
bring in much needed funds for the cash strapped government, is it the best
foot forward and do we not have any alternatives?
In fact, we
already have a number of critical sectors entirely in private hands. As an
example- one of the key infrastructures that the post pandemic world requires
is internet connectivity. Work from home concepts, e-learning, tele-medicine
are by products of the social distancing that the virus has mandated.
Even with
the upheaval Reliance Jio caused, competitors have managed to cling on by means
of consolidation and price matching tactics. But the Supreme Court’s verdict directing
telecos to cough up over 1 lakh crore in AGR dues seems like a nail in the
coffin, creating a deep chasm in the market with incumbents facing an uphill
battle to break even. Question of capex to facilitate latest technologies like
5G is pointless. Given the almost non-linear increase for the requirement of
internet connectivity, is it all roses that there is no credible state entity
in the telecommunications space?
Instances of big tech’s control and influence abound in the Western world. Is it time to adopt it for the Indian context?
A necessity or an opportunity?
Secondly,
the government has introduced wide ranging reforms in a variety of sectors
ranging from agriculture to space. FDI in defence has been opened up to 74%, up
from 49%. Coal mining, mineral extraction, space exploration, atomic energy
partnerships have all been opened up for the private sector. One thing to be
cognizant of here is even though the reforms are touted to bring about a
self-reliant India, these measures are unprecedented. On that backdrop, the
question that needs to be raised is whether the government is opportunistically
using the pandemic to usher in these measures, sideling public debate and
diligent examination. Will these reforms be adequately debated in the
constitutionally mandated lower and upper houses? Does the scope of the pandemic
even allow such an examination at this point in time?
The whole exercise has been branded as proactive response to the virus, but I think we can all agree that for all the reforms put forth, none of them are going to alleviate economic distress in the near term. No doubt
the measures outlined in the “Atmanirbhar” package will have long standing
impact; whether that is for the good or the ugly, remains to be seen.
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