EBM News
EBM News

Learn from past mistakes, plan for life after lockdown: Raghuram Rajan

CHENNAI: As the common man patiently waits for the 21-day lockdown to end on April 14 to resume his regular activities, former RBI governor Raghuram Rajan warns that life may not be the same again for many.

Once India wins the battle against COVID-19, there will be a bigger war waiting — fixing the large-scale disruption caused by the unprecedented shutdown, he says.

Urging the government to plan the post-lockdown strategy urgently, the former banker notes that what the country faces today is an economic emergency.

“The global financial crisis in 2008-’09 was a massive demand shock, but our workers could still go to work, our firms were coming off years of strong growth, our financial system was largely sound, and our government finances were healthy. None of this is true today as we fight the coronavirus pandemic,” he said in a blog posted on his LinkedIn page.

He says the government should have a plan for what happens next after the lockdown, even if the virus is not defeated by then. There is no way a billion-plus population can be locked down for a longer period of time, he adds.

“We have already seen one consequence of not doing so – the movement of migrant labour. Another will be people defying the lockdown to get back to work if they cannot survive otherwise,” he warns.

After the restrictions are lifted and businesses resume, companies must take steps to protect staff resuming duty by offering uncrowded transport, distancing at work, temperature checks, personal protection equipment, plus measures to identify and contain new infections, he writes, adding that healthy youth can be lodged in hostels near their workplace.

While direct benefit transfers help the poor in the next few months, Rajan rues the transfers don’t reach all and the money is not enough Noting that India reforms only in crisis, he says this “otherwise unmitigated tragedy will help us see how weakened we have become as a society, and will focus our politics on the critical economic and healthcare reforms we sorely need”.