View: Centre must counsel states that localized lockdowns are a lose-lose strategy

It's already clear that localized lockdowns (LLs), mostly in major urban centres and industrial hubs, are choking a national economy that had just about emerged from the coma induced by a national lockdown. What is not clear is why the Centre, which pivoted to the cause of economic revival weeks back, isn’t responding to the real threat of green shoots getting trampled by galloping LLs.
More than 40 crore of 130 crore Indians are under various forms of lockdown currently. Most of them live and work in major centres of economic activity. We can go green in the face saying we will have a bumper harvest. We can crunch numbers on the village economy and say good crops, normal monsoon, extended NREG will raise rural demand. But it’s been clear for 30 years now that India grows on the back of its urban demand and industrial performance.

So, the rash of LLs, unless rolled back, will have an entirely predictable outcome more frightening than the already frightening 2020-2021 economic projections.

Worse, there’s little or no evidence that an LL is an effective strategy to contain a localized rise in covid infections. Data shows it’s very difficult to conclude that an 14-day or 10-day or a weekend LL will or has tamped down infection spread.

Delhi saw a massive spike in cases and the positivity rate soon after the national lockdown lifted. Some weeks down the line, those numbers have sharply come down. But Delhi never imposed a city-wide lockdown. Mumbai’s daily case numbers have relatively subsided as well. But the city’s numbers were far higher when a severe lockdown was in force for weeks. The fall in numbers can’t be correlated with any LL. Similar lack of evidence can be seen from data in other previous hotspots – Ahmedabad, Bhopal, Indore.

Therefore, that administrators in newer hotspots – Bengaluru, Chennai, Hyderabad, Pune, Thane, Aurangabad among them – are looking at LLs as the best answer to infection spikes is likely explained by two unlovely facts.

First, LLs are blunt instruments and the Indian state just loves blunt instruments. Second, state and local governments are still in panic over rising infections because they are not testing enough and so are not in a position to impose micro isolations.

The idea that post the national lockdown small containment zones will be the cornerstone of an anti-covid strategy seems to have been abandoned by nearly a dozen states.

That’s why the Centre needs to step in. That a state or a local administration has the right to impose an LL is not in doubt. But there’s equally no doubt that the only antidote to the viral spread of LLs, which will have little effect on covid counts and a huge effect on the economy, is intelligent Central intervention.

This Central intervention, given states’ rights, will necessarily have to be in the form of discussion and counsel.

States, whether or not ruled by BJP, must be told politely but clearly, that LLs in urban centres and industrial hubs are derailing the national economic engine.

States must be reminded, again politely but clearly, that ramped up testing and small containment zones are the answer to infection spikes.

Following from these, and most important, states must be counseled that a spluttering economic recovery is against their self-interest, indeed it poses a fiscal existential question.

State government borrowings are already at extraordinarily high levels. The share of Central revenues that states get is critically dependent on economic activity. LLs imposed by states may well dampen GST collections, which have just started showing signs of life.

Since states can’t indefinitely borrow at current levels and since LLs will make the national revenue pie smaller, Chief Ministers may confront, within this financial year, terrifying fiscal constraints. And that will have its own knock-on effects on welfare spends and economic activity.

Meanwhile, that LLs don’t have a clear impact on containing infection spread will become clearer and clearer. Chief Ministers scared of presiding over rising covid numbers now will find out that they gained very little but lost a great deal. How’s that for a truly self-defeating strategy?

True, in India’s charged and often viciously combative politics, the Centre may have a tough job counselling panicky Chief Ministers. A rational federal structure depends on all actors being rational. But if states are letting fear and bad thinking dictate strategy, and if that strategy is going to cost India dear, it is incumbent upon the Centre to take the lead.

And ultimately, a slowing economic revival will cost the Centre dear. So, it is as much in New Delhi’s as it is in Bengaluru’s and Hyderabad’s and Kolkata’s self-interest that localized lockdowns be replaced by a smart national strategy – more testing, small containment zones and a big helping hand for economic activity.

India’s anti-covid strategy must find its Centre again.

Disclaimer: Views are personal