Abstract
Jayati Ghosh, The Making of a Catastrophe: The Disastrous Economic Fallout of the Covid-19 Pandemic in India. Aleph Book Company, 2022, 271 pages, ₹799 (Hardbound). ISBN 978-93-90652-96-9.
The book is a comprehensive but grim account of the disastrous impact that the COVID-19 pandemic has had on the Indian economy—an economy that was ill-prepared in the first place to handle the gargantuan fallout of the catastrophe as it unfolded from 2020 and peaked around April to May 2021.
While the direct impact of the pandemic on the health of the population is touched upon, the emphasis of the book is more on the devastating impact of the pandemic on the economy, covering various sectors, with a special focus on the labouring poor. More importantly, the book demonstrates that given the lack of cohesion in policy, which also betrays a comprehensive understanding of the scale of the task at hand, some of the adverse impacts are here to stay.
The book is very well-structured, consisting of six chapters apart from an Introduction that is interestingly titled as ‘The Policy-driven Catastrophe’ to drive home the point, among others, that much of the suffering could have been mitigated, if not averted, if those in power had put in place appropriate policies. This should have included expansion of public expenditure rather than curtailing it, compensating the poor for their loss of income and livelihoods, and, been sensitive to the plight of the millions of migrants who were left in a limbo consequent to an overnight lockdown declaration. The lockdown period should have been used to strengthen public health infrastructure.
Chapter 1, namely, ‘Covid-19 and the Global Economy,’ sketches the disproportionate impact of the pandemic on developing countries,
[B]ecause they do not have internationally accepted currencies, they have to receive foreign exchange through trade, remittance or capital flows in order to import and make other payments such as on their external debt… While trade volumes and values declined across the board, the sharpest price declines were in primary commodities, which are of greater export importance for developing countries… Developing countries are also, in general, much more dependent on remittances from migrant workers in other (typically advanced) countries and such transfers were also hard hit in the ongoing crisis. (pp. 24–25)
In discussing the status of the economy before the pandemic, the author, among other things, emphasizes India’s long record of abysmal investment in health infrastructure and in recruitment of health personnel (even when the economy was among the fastest-growing economies in the world) that was instrumental in India being relatively unprepared when confronted with a major pandemic like COVID-19. Furthermore, the book documents how, unlike many countries, the Indian government has a long tradition of delivering essential healthcare services through special ‘schemes’ or ‘programmes’, or, ‘missions’ (p. 73). An adverse fallout of such delivery is the designation of workers, predominantly women, under these ‘schemes’ or ‘programmes’ as volunteers and who are paid an honorarium for their services. This trend, which started in the 1990s, gained traction during the pandemic when extraction of labour (at low cost) from such workers reached its peak even as the risk arising from exposure to the infection (because of poor provision of protective gear) was borne by the workers. Worse, quoting field-based studies, the author records that workers who were central to the control of the pandemic, namely, those dealing with hospital waste management and dead body disposal, as well as those dealing with municipal solid waste management and disposal, ‘were denied the most basic protections during the pandemic, even as they remained overworked and underpaid and without minimal social security’ (p. 134).
The lockdown that was imposed on the country abruptly on 25 March 2020, the most stringent in the world, exposed, among other things, the utter insensitivity of the government to the plight of millions of informally employed migrant workers, who overnight found themselves locked out of their jobs, rented premises, and without access to food and transport, forcing them to walk hundreds of kilometres in an attempt to reach their homes. Many perished on the way due to exhaustion or collapsed on reaching their destination as they had got infected en route.
Chapter 4, ‘The Economic Fallout’, is, in a sense, the nub of the book. Arguing with hard evidence how the Indian economy was by most indicators, among the worst performers in the emerging economies’ group, the author explains that
the extreme parsimony of the government’s fiscal response, which was among the stingiest in the world in terms of very little additional expenditure during the pandemic… was a major factor in the very poor performance of the economy since the impact of the lockdown and pandemic were not counterbalanced by big fiscal increases. This had immediate effects on suppressing domestic demand, and also impacted the future path of the economy, reducing its investment and growth potential. (pp. 140–141)
The author lists and analyses the various relief packages that were announced soon after the lockdown; reading between the lines of each of these packages, the book demonstrates how through clever shifting of existing spending across budgetary heads, renaming or revamping existing schemes, orienting measures to provide liquidity to businesses that did not require additional outlay, passing on future debt burden to the states, the central government got away with too little.
Total additional public spending by the central government promised by these relief measures amounted to only around 1 percent of GDP. Ultimately even these announced allocations were not spent; in the period of greatest need, the seven months to December 2020, less than 10 percent of the promised ₹10 trillion had actually been spent. (p. 145)
Given extremely poor social protection measures for majority of the people, bulk of which population works informally, it is a no brainer that inequality (already high since 2000) intensified further over the course of the pandemic. ‘Inequalities increased across almost all dimensions… In the labour market, there were sharp differences between those employed with formal contracts and informal workers who had no social or legal protections over this period’ (p. 189).
Jobless growth has been a characteristic of the Indian economy long before the pandemic, and the phenomenon took a turn for the worse during the lockdown. In Chapter 5, ‘The Impact on Workers, Livelihoods and Lives’, using data provided by the official Periodic Labour Force Surveys and the large private surveys conducted by the Centre for Monitoring Indian Economy, Ghosh documents that employment fell
by around 20 percent in April-June 2020 relative to October-December 2019, amounting to around 88 million workers who were rendered completely jobless or without any livelihood… The recovery of employment that occurred as lockdown measures were eased were largely because the paucity of relief measures meant that most people were forced to seek some employment, however meagre the payment, simply to survive. (p. 193)
The employment crisis hit women more and in several ways; while self-employed women were badly affected by the collapse of markets for their products, lack of recognition of women as farmers meant that they were denied passes to access transport; unpaid work, performed largely by women increased phenomenally not least due to closure of schools or inability to access childcare and/or elderly care, but also due to poor sharing of responsibility by male members of household. Worse, as several studies, including this book, have documented, domestic violence increased during lockdowns, ‘leading the United Nations to describe it as the shadow pandemic’ (p. 216).
The long-term consequences of disruption in education consequent to the pandemic are still being felt in terms of the inability of many students to reach pre-pandemic levels of learning. The switch to digital learning starkly exposed the gross inequality among the haves and have-nots since digital learning requires not only devices such as smartphones and/or computers but also adequate levels of connectivity and ability among teachers to use these devices effectively for teaching—all of which was and still is applicable only to a small proportion of the population in our country.
In Chapter 6, ‘Getting Out of the Mess: A Positive Agenda’, the author reiterates the measures already outlined in the Introduction, the implementation of which, according to her, could as yet salvage the situation and save the economy from going further downhill. Emanating organically from the discussion in the book, these measures include a proactive fiscal policy that raises public spending that results in employment generation for the vast majority such that demand for goods increases for spending to have a multiplier effect. Given that adverse environmental impacts of ‘development’ hit the rural areas and the poor the hardest, in terms of destroying their livelihoods, the author emphasizes the need for future strategies to be evaluated in terms of environmental costs and benefits (p. 238).
Instead of the Universal Basic Income that is often advocated, the book proposes a social protection floor that consists of the following four elements:
[U]niversal access to basic nutrition; universal access to good quality basic services such as health, sanitation and education; universal access to basic employment through an employment guarantee scheme in both rural and urban areas; and universal state-provided non-contributory pensions for those who cannot work, and do not receive pensions from other sources. (p. 239)
What would have considerably enhanced the quality of the discussion and given the book a much-needed balance is the recognition of the contributions made by numerous individuals right across the spectrum. NGOs and civil society organizations rose to the occasion and tried to meet the needs of various sets of people. These services included funding the return journey of migrants, sourcing ambulances to ferry people to hospitals, dunzoing (app-based delivery system) food in urban areas to the elderly either living alone or in institutions, providing free meals to sanitation workers; volunteering to teach children in open spaces that doubled up as classrooms—the list goes on. Notwithstanding the fact that the above measures were a drop in the ocean and certainly cannot substitute what the government (both at the centre and the states) should have done, maintaining a complete silence by hardly citing literature that has documented such measures, renders the book, to that extent, one-sided and somewhat incomplete.