True, responses to these crises are not perfect but each year bureaucracies build on their learnings. The pity is that the political apparatus is rarely able to reorient crisis responses in meaningful and lasting ways. While governments have demonstrated agility in dealing with an immediate crisis, they rarely spot opportunities for lasting reform. The last time that happened, the country was set on the path of economic liberalisation.
Covid was the first test case since then. Admittedly no country in the world was prepared for the pandemic, and each initially struggled for a coherent response. In India, there has been justifiable satisfaction at the speed with which the vaccine was rolled out, and the government’s proactive fiscal responses that somewhat cauterised the impact for the poor. Fading in public memory is the virulent Delta phase of the virus when death rates soared, as citizens simply died for lack of access to a hospital bed, oxygen, ventilators and basic nursing. The virus fully exposed India’s sub-Saharan standards of health care and successive governments’ abdication of responsibility towards this critical component of human development over the years. In that nightmare period, officialdom vanished from public view — except when it came to fiercely contesting high death statistics against all the evidence (the fact that Donald Trump’s America and Jair Bolsonaro’s Brazil did worse on this score must offer little comfort).
The obvious long-term lesson from this is that the Centre and states urgently need to reverse the decades-old ennui over health care spending so that the country is better prepared for the next health crisis. Yet the needle on this has scarcely moved. In March 2022, a parliamentary reply said India had 0.6 beds per 1,000 population in 2021. That figure has improved to 1.3 beds per 1,000 population. That’s still below the National Health policy’s 2017 guideline of two beds and the global average of 2.7 beds.
Worryingly, much of the growth has come from a healthy expansion of private hospital beds with a growing number of petty entrepreneurs spotting a profitable opportunity in a chronic shortage. This trend is troubling mainly because private hospitals tend to be urban-oriented, whereas rural India is catastrophically short of even primary health care. They are exclusionary in their patient intake. The poor or destitute are routinely turned away from their luxurious granite exteriors. Despite a substantial 10 per cent jump in health care allocations over the last year, health care is scarcely an expenditure priority. It accounts for less than 2 per cent of government expenditure and less than one per cent of GDP.
The West Asian war offers another opportunity to shift the dynamics of policymaking and economic spending priorities. When the Straits closed, Kartavya Bhavan moved swiftly to shield the consumer from cooking gas shortages by restricting industrial and commercial usage, rationing supplies and reducing taxes to hold the line on pump prices. Those are astute moves ahead of Assembly elections but they ignore the longer term impact of joblessness as eateries and small businesses shut shop for lack of fuel. In short, Indians are now facing the consequences of failing to build strategic natural gas storage facilities even as the government sought to expand demand through Pradhan Mantri Ujjwala Yojana subsidies and the expansion of piped natural gas, both of which are mostly imported. The creation of strategic crude oil reserves is the other spending priority that this crisis demands. Some moves are being made to build buffers; whether they are sufficient is the open question.
As the Kharif season approaches, Indian farmers are staring at a fertiliser shortage owing to supply disruptions in the Straits of Hormuz. With domestic production falling and the cost of imported urea, the most heavily subsidised nutrient, rising, the government expects its already outsized fertiliser subsidy bill to burgeon. This would provide a good opportunity to reorient the subsidy from manufacturers to farmers. A long-standing prescription from the more thoughtful agricultural economists, a Direct Benefit Transfer (DBT) to farmers for fertiliser costs has the potential to save the exchequer ₹75,000 crore annually, plug the leakages that inevitably accompany subsidy schemes, and save India’s rapidly deteriorating soil health from excessive urea application.
As with expanding health care delivery, building strategic fossil fuel reserves, realigning an increasingly burdensome fertiliser subsidy or even fast-tracking electric vehicle (EV) usage, the government has a unique opportunity before it — and a popular mandate — to leverage this crisis for durable benefits. It should not close this window of opportunity.
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