India Might See 'Serious Livelihood Crisis' In Near Future: Economist Jean Dreze

With lockdowns returning amid the devastating second wave of the COVID-19 pandemic in India, the working class might face a "serious livelihood crisis" ahead, well-known economist Jean Dreze told PTI.

Criticising the government's economic policies, he said the target to achieve a $5 trillion economy by 2024-25 was never a feasible one, reported The Free Press Journal.

He observed that today's situation is far more critical than a year earlier at the time of nationwide lockdown. "The economic consequences of local lockdowns may not be as destructive as those of a national lockdown. But in some respects, things are worse this time for the working class," he said.

The economist said that the COVID-19 crisis has become more serious with mutations in the virus, which can spread faster, which will make the economic revival harder than earlier.

He said that several people exhausted their savings during the lockdown last year and now have no money left. Many of those who took loans last year may not be able to do it again.

Dreze said the government's relief package saved some of the people last year. However, there is not a single word about relief packages during the second wave.

"In short, we are heading towards a serious livelihood crisis," he said.

He criticised the BJP government in the Centre for suppression of data and said that whenever the data showed the government's failure, they retracted that data. They refused to admit 'community transmission' during the first wave and are hiding the number of deaths during the second wave.

He opined that the government's denial to admit the crisis and presenting misleading data has made the situation worse. "Denying a crisis is the surest way to make it worse. We are now paying the price of this complacency."

India has been reporting over three lakh fresh COVID-19 cases daily since April 25, while the number of daily deaths has been above 3,500 this month.

Noting India's low expenditure on public health, he said several governments in the past and this government had neglected the health sector, and people are now, the entire country is paying the price.

Talking about the possible solutions, Dreze said the government could once again give the 2020 relief package, but the focus should be on implementing measures for the long term as short term measures often give rise to confusion and corruption.

Jean Dreze was part of the National Advisory Council (NAC) that had advised the previous UPA government and is one of the key architects of social security schemes Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). He advocated the expansion of coverage under the public distribution system and said a well-functioning system of cash transfer system that can be activated in a crisis like these is the need of the hour.

"Going beyond existing schemes, I think that a well-designed, inclusive cash-transfer programme would be useful," Dreze opined.

He said measuring India's progress through GDP is useless and only caters to the "super-power ambitions of the Indian elite."

"The standard approach is to look at GDP at its per capita terms. But then India looks like one of the poorer countries in the world, which it is. Looking at aggregate GDP, which is naturally quite large because of India's large population, creates an illusion of prosperity and power," he argued.