Three economists – former Reserve Bank of India Governor Raghuram Rajan and Nobel laureates Amartya Sen and Abhijit Banerjee – on Thursday said India should focus on providing food to everyone, and not worry about leakage in the public distribution system during the period of the lockdown imposed due to the coronavirus pandemic.
India has so far reported 12,380 coronavirus cases, with 414 deaths, according to the Union Ministry of Health and Family Welfare.
“We in India worry a lot about the possible missteps that can happen in the implementation of large-scale transfers,” the economists said in an article published by The Indian Express. “But in times like these, amidst the pandemic and the global economic crisis, with the nation in lockdown and with lives and livelihoods at stake, it is the wrong set of concerns.”
The economists said that as it is now clear that the countrywide lockdown will go on for a long time, either in a staggered manner or in total, the biggest worry is that many people will be pushed into poverty or even starvation. This may lead to large-scale violations of lockdown rules, they warned.
Prime Minister Narendra Modi had on April 14 announced that the lockdown, which began on March 25, will be extended till May 3. However, agriculture and some allied industries will be allowed to operate in “non hotspot” districts after April 20, in an effort to kick-start the stalled economy.
The economists said the stocks of food with the Food Corporation of India stood at 77 million tonnes in March 2020, which is more than three times the required buffer stock. “Giving away some of the existing stock, at a time of national emergency, makes perfect sense,” they added.
They said that while the government has shown a willingness to use the stocks by offering a supplementary PDS provision for three months, this time period may not be enough as the economy will take longer to get back on its feet. “More importantly, a substantial fraction of the poor are excluded from the PDS rolls, for one reason or another [such as identification barriers to get a ration card] and this supplementary provision only applies to those who are already on it.”
The three suggested that the government instead should issue temporary ration cards with minimal checks for a period of six months or thereabouts. “The cost of missing many of those who are in dire need vastly exceeds the social cost of letting in some who could perhaps do without it,” they pointed out. Sen, Rajan and Banerjee added that this would mean expanding the PDS system, setting up public canteens for migrants, sending food home to children who cannot leave their houses and roping in local non-governmental organisations to reach the most marginalised.
The economists also said that apart from ending starvation, the Centre should focus on mitigating the unexpected loss of income and savings that farmers and shopkeepers are now experiencing. “The government has partly recognised this in the cash transfers it has promised to certain groups; but the amounts are both small and narrowly targeted,” they asserted. The economists asked why cash transfers are being provided only to farmers and not to landless labourers, as well as to the urban poor.
“If there was ever a challenge that requires brave and imaginative action, this has to be it,” Sen, Rajan and Banerjee wrote. “We need to spend wisely given the enormous likely demand for fiscal resources in the coming months, but skimping on helping the truly needy is the surest way to lose the plot.”