Costs of a Crisis

In Sep 2020, I had written a blog titled Greenwoods for the GDP on the backdrop of massive liberal & opposition outcry as the FQ12021 GDP fell by 23.9% y/y. In the blog, I had presented the economic background on why the fall was inevitable, how it stands in context of our country's fight with the #ChineseCommunistVirus as well as certain socio-economic comparisons with the developed world. I had also mentioned how our leadership chose to take the middle road by attempting a balance between lives & livelihood, the two twins in any crisis. Eventually, I had remarked that how the Left Liberal Ecosystem would have gone to town over fatalities if not the GDP fall had India chosen to be as brazen as say the USA when it comes to restrictions and safety protocols. Seven odd months down the line, the ecosystem has found that long lost twin called lives ironically in the Kumbh Mela in Haridwar. Given that the fabled ecosystem has found this twin after pompously expressing mock concern over the other twin called livelihood back in Sep 2020, I thought about taking up this opportunity to present the twin sides associated with any crisis taking the example of Kumbh Mela in Haridwar.

To present a quick primer, I wish to draw attention to the fact that Haridwar Kumbh 2021 witnessed its first snan on 14th Jan 2021 and we have only two more to go before the event concludes on Chaitra Purnima, 27th Apr 2021. During this entire period, cases have only been reported over the last week. As per reports, there have been at least 14 lac attendees who would have been tested either in their home states before travelling to the Kumbh or at the entry points of Haridwar. Of these, 2,167 testing positive implies a TPR of 0.2% which is way below the stable rate of 8% nationally and certainly much lower than states like Maharashtra which stand at 12%+. For the eternal cynics who would complain of under-reporting & case manipulation, even if we increase the caseload by a factor of 10x, the TPR is still 2%. The fact that entire Uttarakhand is still recording less cases daily compared to states such as Maharashtra, Chattisgarh, Karnataka & Delhi or even less than those going to polls such as Tamil Nadu, Kerala and West Bengal is a major clincher in itself. The numbers also aid the demolishing of the fancied secular argument of falsely equating Kumbh with Tablighi Jamaat of Mar 2020:

1. Jamaat was a super-spreader with roughly 40% cases then linked to the Markaz event when the caseload in India was hardly anything to go with, Kumbh has not thrown up any such observations.

2. Jamaat openly flouted government regulations; on the other hand, Kumbh is following COVID protocols on testing, public sanitation and management - in fact, Uttarakhand Government's website on the Kumbh Mela is pretty informative with clear COVID SOPs.

3. Jamaat attendees were seen spitting, urinating, defecating, not co-operating and attacking frontline workers with its leader openly championing Corona Jihad supported by a host of Mullahs and Maulavis throughout the country; Kumbh attendees are NOT!

For interested readers, I had explored the Tablighi Jamaat phenomena and the wider secular argument in my blog, Fidayeens are Few, in Apr 2020.

In spite of the information presented above, does it mean that such events are acceptable? It is practically a no-brainer that lakhs of people congregating together, taking a holy dip while seriously violating COVID protocols is a massive infection risk. As a thumb-rule, it should be avoided without a doubt especially with the medical infrastructure stressed heavily. This comes from an individual who was also not supportive of family functions/wedding ceremonies knowing that there is a natural callous disregard towards safety protocols. This is where the tricky path of perspectives and trade-offs comes in that makes even seemingly obvious choices not feasible eventually.

If we refer to the the State of Uttarakhand's FY2020-21 Budget, it can been seen that the state's 38% GSDP (Gross State Domestic Product) comes from Services which is accelerating even as Agriculture and Industries sectors are decelerating - who can forget the Feb 2021 flash floods that washed off key Hydro projects. Within services, Tourism & Hospitality (T&H) is a major source of revenue and employment for the citizens of Uttarakhand. Given the tremendous beating T&H has taken over the past year, a state like Uttarakhand has been hurt economically. It has a higher fiscal deficit to contend with, i.e. 2.57% of GSDP, as well as a high debt-to-GSDP ratio of 24.4% of GSDP which is higher than both previous years. These numbers suggest the importance that events like Kumbh have for the economy of Uttarakhand - 14-30 lakh attendees visiting the state within three months means cash inflow, revenue and employment.

Way back in Mar 2020, I remember having a friendly informative argument with two medico friends on the decision of lockdown. The argument happened one week prior to the Janta curfew in late March and I had opined that lockdowns are not advisable; they can be pulled off only if employed strategically for an extremely limited period of time enough to provide some breathing space to understand the threat and ramp up defenses against it all the while ensuring that the poorest strata of the country are taken care off for their daily needs. I was pleasantly surprised to witness positive results the lockdown yielded - it proved that the Central Govt. was confident of its tactics and the citizens also rallied together. However, these are strategies which can't be used again and again with diminishing marginal utility setting in much earlier. For those of us blessed with WFH and even amongst those who didn't experience salary reductions, the pinch of the pandemic was nothing compared to those whose livelihoods were dependent on whether they are allowed to step out of their homes or others are allowed to visit their establishments. There is a limit to how much savings can be burnt, how much costs can be incurred and how long an individual, a family, a society, a state or an economy can survive without working. While the technical definition of essential services is limited to food, banking, medicine etc, for a family that is fully dependent on a hotel, inn or home-stay they operate or an artist fully dependent on the art he/she performs, the definition of essential services extends to his/her profession as well. This is the cost of any crisis - either the individuals have to bear it directly or the taxpayer has to bear it, albeit indirectly.

Put simply, The Uttarakhand Govt. is willing to bear the cost of 1-2% positive COVID cases and take the risk of death in a bid to induce momentum in a challenging economy. Yes, there can be debate on how can safety protocols be implemented better, how is the testing being managed, is the gathering acting as a precursor to any devastating outcome or are there any gaps which can be plugged (possibly forced re-testing of those leaving the gathering etc); but can we actually ban & block our way out of the crisis now, at this stage? Those who would value their safety, might choose to stay away; others might attend - but the choice to do so, with reasonable & committed attempts to make the whole event work, shouldn't the choice stay for those who need to take it?

This exact logic can be extended to election rallies and IPL as well. The former is an integral part of selection of the leadership of an economy, a choice that will determine the livelihoods of crores of people and suggesting one-sided curbs on it is disregarding the basic tenets of democracy as well as economics. Even for the IPL, the taxes that accrue from franchises & players, the state cricket associations earnings and the employment to ground staff, hotels, transport/logistics, media/advertising, kit suppliers etc is undeniable. In that backdrop, an individual disallowed from roaming on the streets is much more logical - we roaming around for the heck of it doesn't result in notable revenue generation in the economy, all the earlier mentioned examples do, whether that be of the Kumbh, elections or IPL.

As an individual and even if I were religious, no I will not attend the Kumbh - that would be by choice; but I am an individual well fed at home with uninterrupted income while working as much as I would be while being at my workplace. If I step out of the boots of this individual and into those of who skip meals over the year, walk miles to save up money for that one trip to the Kumbh or into the shoes of all those who look for that one customer to rent a room overnight or of those artisans hoping to close a sale during the Kumbh or of those cab drivers hoping to earn some income, I might end up with a different perspective.

When an average currently WFH professional chooses to pander to the whims & fancies of unreasonable superiors, stretch inhumane hours to deliver client requirements and endanger his/her physical/emotional well-being, then is he/she not choosing livelihood over lives even if not via a contagious virus?

No decision is in isolation - every decision has its pros & cons with each having an attached risk/probability to it. Eventually, it is the net outcome which matters - whether the costs incurred are worth the returns!

Likewise, I'll leave the reader to judge whether the costs of the Kumbh and similar choices the nation will face in the times of this pandemic are more than made up or not by the economic returns on offer.

Jai Hind!