Thursday, May 21, 2020

Covid-19: Converting a Public Health Crises into a Humanitarian and Economic Crises


It’s now over 4 months into the Covid-19 global pandemic with cases in India touching 117000 and over 3500 deaths (as on 21st May 2020) and there seems to be no light at the end of the tunnel. This is because of the tunnel vision of our governments, policy makers and a wide variety of experts. What was essentially a public health crises has been converted into an economic and humanitarian crises.

We have had similar pandemics in the past like SARS in 2003, H1N1 in 2009 and later years etc. They were all dealt with as a public health crises and managed by each country within the context of their healthcare system capacities. Infact in 2019 India saw 28798 reported cases of H1N1 with 1218 deaths, a case fatality rate similar to Covid-19 and we have forgotten about it. There was no lockdown for this and neither in 2017 and 2015 when H1N1 cases were 38817 with 2270 deaths and 42592 and deaths 2990, respectively, with case fatality higher at 6 and 7 percent was there any lockdown. H1N1 is here to stay like tuberculosis, malaria, chikungunya, leptospirosis, encephalitis, pneumonia and many other diseases. We have probably developed some level of herd immunity to it. So what seemed to have changed that a complete lockdown over a prolonged period became the main solution to tackle covid-19?

Generating a psychosis of fear amongst people so that they become obedient subjects of the state and those in power, especially the right wing regimes, can control their thinking, actions and behaviour. Events like clapping and banging thalis, lighting lamps and torches and showering petals from aircraft are mechanisms to test such obedience and build a false sense of solidarity instead of focusing on the problem at hand which is the public health crises and the lack of capacity to handle it due to the gross deficits from which the public health system suffers. This fear psychosis is daily perpetuated by debates and discussions on news channels wherein government representatives and various experts are issuing advisories to people as to how they should behave and face the crises but in terms of services which people need there is not much being done to meet the demands and needs of people. So this perpetuates further fear. As the infection spreads to poorer clusters like slums and the poor communities and Dalits, social discrimination is clearly visible where increasingly people are being denied access to medical attention not only for covid-19 but also non-covid cases. For example tuberculosis detection has fallen drastically as has access to treatment for existing patients where drug supplies and nutrition supplements have been drastically affected. Or people with other medical emergencies are being sent away from hospitals and such denials have resulted in unnecessary deaths as reported widely in the media.

If we had invested in a robust comprehensive primary healthcare system and that was in place when covid-19 hit us the healthcare system would have been better placed to respond to it effectively and such a complete lockdown would not have been necessary – perhaps highly infected clusters could have been identified for containment and locked down with appropriate planning and support for testing, contact tracing and treatment, and access to essential supplies. Kerala is clearly an outstanding example where the well-developed primary healthcare system and coordinated efforts of various government agencies helped to contain the spread of infections. Similarly Goa, Puducherry, Sikkim, Mizoram and other Northeastern states (except Assam) have controlled and contained the covid-19 attack because of their well-developed primary healthcare systems. There is clearly something for other states to learn from these states – but most importantly that these states spend more than twice the national per capita average public health expenditure. And consequently have robust public health systems.

The total lockdown for over 8 weeks now has created havoc across the country and transformed what was essentially a public health crises into an economic and humanitarian crises. With the lockdown businesses and establishments shut down and given that over 80% of the workforce in India is daily wage dependent and a large proportion of them migrate to large cities across the country for employment, this workforce lost their means of livelihood, were displaced and made completely insecure and pushed into a humanitarian disaster. The migrants without work could not continue to sustain themselves in the place of their calling and had no choice but to go back to their origin states. The states response was very weak in dealing with the lakhs of such stranded people despite sitting on millions of tonnes of food grains and vast amounts collected in PM Cares and CM relief funds. State agencies completely failed the people and created a humanitarian crises of unprecedented proportions. The civil society response – peoples movements and collectives, trade unions, NGOs, religious groups, community groups, afew corporate foundations and even individuals and resident groups all pitched in with collecting food and rations, cooked meals and other essentials like soaps and masks and distributed them widely and prevented catastrophic hunger deaths. The Union government and most state governments failed in their humanitarian response and were only making announcements and proposals of schemes which as yet have not been seen working on the ground in any significant way.  Tax resources from the Centre have not reached states and with states’ own taxes like alcohol excise duties, VAT and fuel taxes, amongst others reduced substantially due to the shut down of the economy the states are running into a fiscal crises and many may not be able to pay salaries in the coming months let alone providing benefits to those economically battered.

The Atmanirbhar Bharat Abhiyaan announced by the PM and explained by the FM has no direct benefits to severely affected people – those who have lost jobs/livelihoods, migrants, homeless and those living in conditions which do not allow physical distancing. No social wages, food security and social security measures beyond what already exist under the targeted schemes for the vulnerable groups. Even MGNREGA is largely non-functional and there is nothing of similar equivalence for urban populations. So the vast majority’s survival is threatened and all the government responds with is sorting out liquidity matters for businesses and financial markets and calls for self-reliance. If each one of us must become self-reliant then why do we need to pay taxes or for that matter why do we need the various economic and social sector departments of government?

The gradual exodus of migrants who were treading hundreds of kilometres is now moving towards a huge exodus with many states in a hugely delayed decision allowing transportation of migrants to their home states and making some arrangements for that. But on the other hand the opening up of the lockdown in the green and orange zones wherein many categories of industry and services are being allowed to reopen their businesses has put the migrant workforce and the businesses in a quandary. Where will the workforce come from if the exodus continues? For example Panjab has 8.5 lakh migrant workers and if they all leave what will happen to the current crop season and the forthcoming kharif season and large number of MSMEs. A similar situation will be in play in states like Maharashtra, Tamil Nadu, Karnataka etc.. which have even larger number of migrants.  Again Kerala stands out as they did provide adequate support to the migrants which has prevented a large scale exodus from Kerala. And when many of these migrants experiencing a humanitarian and economic crises reach their home states there is a public health disaster of unimaginable proportions waiting to happen as most of these “home states” have very poor public healthcare systems and don’t have the capacity to cope with such a health crises. Odisha, Bihar and UP have already started to feel the impact of returning migrants. When well endowed cities like Mumbai and Delhi which have highest number of cases and deaths attributable to covid-19 are not able to manage this crisis effectively the other states would just collapse under the burden.

Monday, March 23, 2015

Maharashtra Budget 2015-16: Continued Abject Neglect of the Social Sectors

As one of the richest states in terms of income one would have expected Maharashtra to have invested adequately in terms of its social and human development. While Maharashtra ranks 3rd in income, it is 6th in IMR and female life expectancy, 10th in immunization coverage and 7th in its human development score, 22nd in overall school enrolment, 20th in gender parity, 5th in crime against women, 16th in access to safe drinking water, and 24th in per capita food grain production. This below average performance is due to inadequate public investments and budgetary allocations in the social sectors which is aptly reflected in the fact that Maharashtra ranks a lowly 21st in per capita revenues raised, 16th in per capita development expenditure and 13th in per capita spent on social services – for education the rank is 11th but for health and rural development it is a dismal 21st and 24th, respectively. So that is where Maharashtra, the most developed state of the country, stands in comparison to other states. Will the 2015-16 budget make any difference to this scenario?

In 2015-16 the budget estimates show a total increase of revenues over the 2014-15 revised estimates of a mere Rs. 12848 crores, that is only 5.6% increase. The increase of revenues over budget estimates of the previous year is 13.8% but that is a misleading figure because in 2014-15 a number of off budget schemes from Centre’s plans like SSA, NRHM, MGNREGA, Swacha Bharat etc.. were added into the state’s budget – thus when we see the original budget of 2014-15 the budget estimate for total revenues was Rs. 213587 crores and in the 2015-16 budget the budget estimate is shown as Rs. 224113, a difference of Rs. 10526 crores or an addition of 5% and the revised estimate of 2014-15 adds another Rs. 6172 crores. Further 2015-16 was expected to add much more resources because of the new award by the 14th Finance Commission which had raised the divisible tax pool proportion from 32% to 42% for the states. The additional resources due to this award no doubt brought in Rs.8849 crores more than the previous year’s budget estimate but the grant in aid from the centre for the same period declined by Rs. 10088 crores, a net loss to the state government of Rs. 1239 crores.  So the big hype that the chief minister made in his comments praising the budget that we have now more resources because of the FC award and we can invest more in infrastructure projects actually falls flat on its face.

On the expenditure side the story is similar. The total increase in spending in 2015-16 over revised estimates of 2014-15 is a mere Rs. 12093 crores or just 5% more which does not even cover the inflation and hence in real terms a decline in budgeted expenditure. Similar to revenues the budget estimates for expenditure for 2014-15 have been changed in the budget 2015-16 document from what was in the original 2014-15 budget estimates. This is again mainly to make adjustments for the off budget plan schemes that began being routed through the state treasury from 2014-15 onwards. So overall the 2015-16 budget is a big disappointment because it really does not add much to the kitty and especially some of the key social sectors which are already hugely underfunded in the state governments budget.

A review of social sector expenditures in Maharashtra over the last decade unfolds a dismal picture with declining trends in various social sectors spending within the state. We define social sector as per the RBI definition that is all Social services plus food security and rural development. Table 1 gives a trend analysis of the key social services and food security and rural development spending in terms of three ratios – per capita, per cent to total govt. expenditure and as a proportion of GSDP. On all these parameters Maharashtra does not do too well and especially so in the case of proportion to GSDP, clearly indicating a lack of political will to reign in resources from the high growth economy and incomes – we have already indicated that in terms of percapita revenues generated Maharashtra ranks a lowly 21st amongst all states.

Overall social sector expenditures in Maharashtra in 2013-14 was 5.47% of GSDP as compared to the average of all states of 6.64% of GSDP. The same is true with regard to social services wherein Maharashtra is lower than the national average. For both the social services and social sectors spending reached a peak in 2012-13, 5.16% and 5.54% of GSDP, respectively and began to slide from there on. The jump we see in social sector estimates of Rs. 9699 crores for the 2015-16 budget over 2014-15 revised estimates is largely on account of a huge increase in rural development budget estimates by Rs.11008 crores apparently to deal with the crises in rural Maharashtra and an effort in writing off the debts of nearly 3 lakh farmers given the large number of farmer suicides and crop damage, as explained by the Finance Minister in his budget speech. We will have to wait till the end of the year to see if this actually gets spent because even the revised estimates of 2014-15 over budget estimates of 2014-15 showed a large increase under this head but we do not see the spending happening and farmers woes continue, further aggravated by the huge crop losses due to unseasonal rains in February and March this year.

In the case of social services infact there is an actual decline of Rs. 1364 crores in 2015-16 over the revised estimates of 2014-15. This is indeed shameful. Thus when we look at disaggregated social sector spending we find that all key social services show a declining trend or at best a stagnation of spending in terms of key ratios. Health, education, nutrition, food security, housing, urban development, and labour welfare all show a declining trend and for 2013-14 the last year for which actual expenditure is available in all these specific sectors the expenditure ratios are one of the lowest for the decade. The increase we see during 2015-16 over 2014-15 revised estimates is misleading because for one they are only estimates and secondly the large allocations for rural development as explained above (increase of Rs. 11008 crores ), as also for SC, ST and OBC welfare (increase of Rs.2208 crores) as well as for education (increase of Rs.4011 crores) where SSA funds were transferred to states and for Water and Sanitation (increase of Rs. 1754 crores) due to special grants for Swacha Bharat campaign represent a shift from accounting in the Centre’s budget to the state’s budget. Will these allocations get translated to actual expenditures we will only know at the end of next fiscal. So not a very promising scenario for social sector investments in Maharashtra given that the major thrust of budget 2015-16 is on infrastructure projects which is reflected in the much larger capital expenditure proportion in the budget estimates. The global benchmark for social sector spending is between 12%-15% of GDP and Maharashtra’s commitment to its citizens is just about one-third of that level. A very long way to go for Maharashtra which can only be remedied with a strong dose of political will and action.




Table 1: Maharashtra Key Social Sector Expenditure Ratios 2008 to 2016

2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15 BE
2015-16 BE
1. Social services per capita Rs.
3052.25
3858.63
4437.52
5027.31
5934.17
6263
6450.89
7391
percent of Govt Expenditure
35.02
37.82
39.80
40.24
41.71
38.91
38.05
36.52
percent of GSDP
4.39
4.96
4.72
4.84
5.16
4.88
4.36
4.44
2. Education per capita Rs.
1551.51
2033.12
2426.83
2653.15
3082.26
3283
3431.25
3807.80
percent of Govt Expenditure
17.80
19.92
21.77
21.24
21.66
20.40
20.24
18.82
percent of GSDP
2.23
2.62
2.58
2.56
2.68
2.56
2.32
2.29
3. Health per capita Rs.
317.56
355.25
417.29
477.62
580.48
631
663.62
836
percent of Govt Expenditure
3.64
3.48
3.74
3.82
4.08
3.92
3.91
4.13
percent of GSDP
0.46
0.46
0.44
0.46
0.50
0.49
0.45
0.50
4. Water and Sanitation per capita Rs.
93.12
98.39
108.93
128.41
109.99
95.68
113.96
380.99
percent of Govt Expenditure
1.07
0.96
0.98
1.03
0.77
0.59
0.67
1.88
percent of GSDP
0.13
0.13
0.12
0.12
0.10
0.07
0.08
0.23
5.Welfare of SC/ST/OBC per capita Rs.
357.85
404.74
447.61
529.54
661.94
741
966.85
1039
percent of Govt Expenditure
4.11
3.97
4.01
4.24
4.65
4.61
5.70
5.14
percent of GSDP
0.51
0.52
0.48
0.51
0.58
0.58
0.65
0.62
6.Socialsecurity&welfare per capita Rs.
121.73
139.88
195.02
200.55
221.86
258
260.19
314
percent of Govt Expenditure
1.40
1.37
1.75
1.61
1.56
1.61
1.53
1.55
percent of GSDP
0.18
0.18
0.21
0.19
0.19
0.20
0.18
0.19
7. Nutrition (ICDS) per capita Rs.
80.40
117.83
172.88
201.95
228.15
218
230.03
257
percent of Govt Expenditure
0.92
1.15
1.55
1.62
1.60
1.35
1.36
1.27
percent of GSDP
0.12
0.15
0.18
0.19
0.20
0.17
0.16
0.15
8. Food security per capita Rs.
48.92
101.89
69.37
45.27
49.68
53
84.36
97
percent of Govt Expenditure
0.56
1.00
0.62
0.36
0.35
0.33
0.50
0.48
percent of GSDP
0.07
0.13
0.07
0.04
0.04
0.04
0.06
0.06
9. Rural Development per capita Rs.
225.57
281.01
270.55
299.92
390.27
337
1324.80
1626
percent of Govt Expenditure
2.59
2.75
2.43
2.40
2.74
2.09
7.81
8.04
percent of GSDP
0.32
0.36
0.29
0.29
0.34
0.26
0.90
0.98
10. Social  Sector per capita Rs.
3326.73
4241.53
4777.44
5372.50
6374.11
6653
7860.05
9114
percent of Govt Expenditure
38.17
41.57
42.85
43.00
44.80
41.34
46.36
45.04
percent of GSDP
4.79
5.46
5.08
5.17
5.54
5.18
5.32
5.47


To change the above scenario  Maharashtra needs to increase its tax:gdp ratio atleast three times. The 2015-16 estimate for social services is Rs.88,762 crores. To provide a reasonable level of quality social services Maharashtra will have to atleast double their allocations so that the deficits in human resources like doctors, nurses and teachers, commodities like medicines, medical equipments, books and teaching materials etc are adequately covered . Tax collection from a high economic growth economy is very poor. According to the Economic Survey as much as Rs. 40000 crores of raised taxes are uncollected due to inefficient tax administration. Further there is a potential to increase state level taxes as well as social security payroll deductions by universalizing social security like ESIS to extend to all employees by removing the Rs.15000 salary ceiling. Similarly the large amount of subsidies in the form of revenues forgone to the corporate sector exists. In case of the Central govt. it is about 5% of GDP but we don’t know this amount for the state government as the state’s budget does not publish a statement with regard to revenues forgone in the state budget.  Transparency of such budget information is a huge gap and  must  be immediately filled. Further the Maharashtra government fails to make available immediately the budget documents online in public domain and this lack of information violates the citizens right to effective participate in the budget process. Infact the Maharashtra treasury website BEAMS is an excellent budget database giving real time budgetary transactions accessible in public domain but it is unfortunate that the budget documents do not get uploaded immediately after they are placed in the Assembly unlike the Central government that makes them available within 30 minutes of the conclusion of the Finance Ministers speech.

We illustrate the neglect through examples of healthcare and nutrition and food security below.

Healthcare
Among social services in Maharashtra the health sector is the most neglected and budgetary allocations to healthcare have seen a continuing decline over the past two decades. Maharashtra is one of the lowest spenders on health care through state budgets. In the eighties Maharashtra had peaked to 1% of GSDP and over 6% of the total government expenditure but since then there has been a declining trend. Today we are at less than half the level reached in the eighties in public health spending. This gets reflected in the abysmal condition of the public health system with deteriorating infrastructure, huge vacancies especially of professional positions, committed doctors and nurses leaving the public health system due to its neglect and underfinancing and a policy shift towards privatization through the route of health insurance. With less than half per cent of GSDP being allocated to health in the state’s budget the health scenario looks very dismal. The message the health budget sends is that health care is an individual responsibility and not a public good. This is a huge challenge to overcome and get the state to make a policy shift to recognizing health as a public good and plan for moving towards universal access to healthcare.  Maharashtra’s health indicators maybe better than the national average but they are certainly not commensurate to its economic development. There is a clear need for more than doubling of resources to the public health sector to revive it with an ultimate goal of reaching an expenditure level of about 3% of GSDP.

Nutrition and Food Security

Maharashtra’s per capita food production and availability is today one of the lowest in the country despite being one of the most developed states. Nutrition intake data from the latest NNMB report (2012) and its previous three surveys shows an overall declining trend in consumption of key food items and nutrients over the last four decades. While this is true for the country as a whole, it is embarrassingly worse for Maharashtra, the most developed state in the country. In terms of the Recommended Dietary Intake (RDI) and the Recommended Dietary Allowance (RDA) Maharashtra was much better off in the seventies and eighties. Post neo-liberal reforms through nineties and the new millennium, despite the 8 to 9 percent growth rate, the biggest declines in food and nutrient consumption is seen. What makes this worse in the present times is the double digit food inflation since the last 2 to 3 years. So what is very clear is that overall food availability and access, especially in the last two decades, has been adversely affected. Further this nutrition deficit is also in many different ways linked to the change in food production patterns and our agricultural policies in the last two decades. Further through the seventies, eighties and until mid-nineties, the EGS played a vital role in assuring reasonable food and nutrition security. With the collapse of the EGS and a much poorer version NREGA in its place this employment security has collapsed and one can see it reflected in the poor nutritional outcomes in the states, especially in adivasi areas. The budgetary trends also reflect declining commitments to nutrition, food security and employment guarantee and this needs immediate correction to restore the nutritional status of the people of Maharashtra. Despite the Food security Act and the employment guarantee act which make these rights of people the allocations to nutrition and food security have not picked up. This is certainly violation of rights and denial of justice. To assure reasonable food, nutrition and employment security these components need atleast 2.5% of GSDP allocated in the budget.