NDTV article March 27, 2020
"Social Unity amid Physical Distancing" is the slogan of Kerala in the war against COVID-19. It was coined after some elements began to use measures for social distancing to justify caste pollution distance norms. Kerala is harnessing its abundant social capital to overcome the limited fiscal space in which state governments are forced to operate in quasi-federal India. Led by a state government with commitment and the actualization of synergies between local governments and civic society, the outcome has been yet another marvellous social intervention for which Kerala is famous. Chief Minister Pinarayi Vijayan has been leading from the front, taking inputs from the different vertical and horizontal agencies and responding to the everyday challenges through a televised, live interaction with the press in the evenings. So there is no confusion and there is clear direction for action.
Of course, at the front line is Kerala's health department headed by Health Minister K K Shailaja Teacher. Kerala has the largest and most efficient public health system and the fight against coronavirus once more underlines how an insurance-based private health system would be totally inadequate to meet this sort of challenge. Kerala's public health system consists of 6,000 doctors, 9,000 nurses and another 15,000 health workers. Then there is a second line of health workers like Asha workers, Kudumbasree health volunteers, Anganwadi workers, hospital development committee members, palliative volunteers and other health activists. In the recent years, there has been an investment of around 4,000 crores in hospital buildings (many which are still ongoing) and medical equipment and a significant addition to the number of medical personnel. The system has also been seasoned with the success of fighting the Nipah outbreak in the recent past.
The first wave of coronavirus with China returnees in February was effectively contained. But in March, things got out of hand when Corona carrying migrants from Europe and Gulf began to return to Kerala. Some of these returnees dodged the health protocols and clusters emerged in a few districts. The health department did a stupendous job generating route maps for all infected persons and putting under observations all their contacts. Kerala today has 1,01,402 persons under observation at home and another 601 persons in hospital, 126 persons under treatment and no deaths. 12 patients, even a 96-year-old couple, have been cured (as of March 26). However, with a daily increase in the number of people put under observation or testing positive, we do not want to take any chance on community spread. The state has whole heartedly-implemented the national lockdown.
But what distinguishes Kerala in this lockdown is the empathy and concern for ordinary citizens with which it is being implemented. Along with the lockdown, we have declared Rs 20,000/- crore package aimed at transferring money into the hands of the people. The most important instrument has been the various welfare pension payments of Rs 1,200 per month (which has been increased to Rs 1,300 from April) for 55 lakh beneficiaries. We are clearing four months' arrears and one month's pension in advance. Thus, the majority of households in Kerala would receive an income transfer of Rs 7,300 before mid-April.
The second element in the package is the supply of food to locked-down families. For the last two weeks, cooked food from Anganwadis is being delivered to children and other beneficiaries in their houses. Besides, special food kits are going to be supplied to all families in Kerala in addition to the normal ration. Another novel program is the Community Kitchens organized by the local governments. Rs 20 meals will be available for takeaway from hotels attached to the kitchens. There will also be arrangements for home delivery. Local governments will prepare a list of families who cannot afford even this amount, for whom meals would be delivered at their doorsteps free. Street pavement sleepers will be accommodated in Kalyana Mandapams and given free food. Migrant workers will be ensured food at the place of accommodation in partnership with the contractor. It is the duty of the local government to ensure their health and food needs.
Who is to run and manage this chain of hotels and kitchens? Kudumbasree, a network of women neighbourhood groups with membership of 32 lakh families, already manage 1,479 Kudumbasree cafes and 946 catering units as part of their micro-enterprise program. The state and local governments will finance and provide material support for the program in order to ensure that their enterprises do not suffer.
Kudumbasree has a track record of more than two decades in micro-finance and a repayment rate of 99 percent. This credibility will be leveraged to mobilise Rs 2,000 crores from banks for providing additional consumption loans to member families. The state government will also provide interest subvention for these loans. This is a component of the Rs 20,000-crore package announced by the state government.
This package also includes the front-loading pf the entire 8 crore employment days allotted to Kerala under MGNREGS to the month of April and May. Kerala also has an urban employment guarantee program on a much smaller scale. Similarly, many of the schemes which directly give money to the poor are also being brought forward to the beginning of the year. We also intend to clear all arrears of scholarships, social justice payments and subsidies which had accumulated because of the fiscal crisis that the state government has been pushed into by the policies of the centre government. Our borrowing has been cut, compensation denied and central transfers reduced.
In the above situation, how is Kerala going to finance this package? There is no other way than to front load half our annual borrowing to the month of April. We have also been demanding the immediate payment of GST Compensation and raising the market borrowings of the State to 4 percent of the GSDP. The present policy of the centre government of enforcing a cut in the state government expenditure in a recession is crazy to say the least.
Kerala has also been the first state to call the State-Level Bankers' Committee and reach an agreement of a moratorium for all loan payments for a year. We have also demanded a special package for sectors severely affected by COVID-19. The RBI has not yet responded. I hope the RBI will wake up and at least take into consideration the guidelines issued to lenders by the Federal Reserve Board of the US and Finance Control Authority of the UK in the wake of COVID-19.
Besides this immediate support to the Covid-affected, Kerala is also rolling out a Rs 50,000-crore infrastructure investment program funded by the Kerala Infrastructure Investment Fund Board. This fund by legislation is to receive an annual grant of half the Motor Vehicle Tax and a special cess on petroleum products. The fund borrows through securitising its assured future revenue flows and finances infrastructure. Projects estimated to be around Rs 50,000 crores have been declared in past budgets and are now ready for implementation. Projects worth nearly Rs 20,000 crores have already been tendered. The rest willd follow soon. This by any standard would be the largest anti-recession package of any state government in India.
This is how, within the limits of federal polity, the government of Kerala is trying to defend its people and economy in these difficult days of the Corona epidemic.
"Social Unity amid Physical Distancing" is the slogan of Kerala in the war against COVID-19. It was coined after some elements began to use measures for social distancing to justify caste pollution distance norms. Kerala is harnessing its abundant social capital to overcome the limited fiscal space in which state governments are forced to operate in quasi-federal India. Led by a state government with commitment and the actualization of synergies between local governments and civic society, the outcome has been yet another marvellous social intervention for which Kerala is famous. Chief Minister Pinarayi Vijayan has been leading from the front, taking inputs from the different vertical and horizontal agencies and responding to the everyday challenges through a televised, live interaction with the press in the evenings. So there is no confusion and there is clear direction for action.
Of course, at the front line is Kerala's health department headed by Health Minister K K Shailaja Teacher. Kerala has the largest and most efficient public health system and the fight against coronavirus once more underlines how an insurance-based private health system would be totally inadequate to meet this sort of challenge. Kerala's public health system consists of 6,000 doctors, 9,000 nurses and another 15,000 health workers. Then there is a second line of health workers like Asha workers, Kudumbasree health volunteers, Anganwadi workers, hospital development committee members, palliative volunteers and other health activists. In the recent years, there has been an investment of around 4,000 crores in hospital buildings (many which are still ongoing) and medical equipment and a significant addition to the number of medical personnel. The system has also been seasoned with the success of fighting the Nipah outbreak in the recent past.
The first wave of coronavirus with China returnees in February was effectively contained. But in March, things got out of hand when Corona carrying migrants from Europe and Gulf began to return to Kerala. Some of these returnees dodged the health protocols and clusters emerged in a few districts. The health department did a stupendous job generating route maps for all infected persons and putting under observations all their contacts. Kerala today has 1,01,402 persons under observation at home and another 601 persons in hospital, 126 persons under treatment and no deaths. 12 patients, even a 96-year-old couple, have been cured (as of March 26). However, with a daily increase in the number of people put under observation or testing positive, we do not want to take any chance on community spread. The state has whole heartedly-implemented the national lockdown.
But what distinguishes Kerala in this lockdown is the empathy and concern for ordinary citizens with which it is being implemented. Along with the lockdown, we have declared Rs 20,000/- crore package aimed at transferring money into the hands of the people. The most important instrument has been the various welfare pension payments of Rs 1,200 per month (which has been increased to Rs 1,300 from April) for 55 lakh beneficiaries. We are clearing four months' arrears and one month's pension in advance. Thus, the majority of households in Kerala would receive an income transfer of Rs 7,300 before mid-April.
The second element in the package is the supply of food to locked-down families. For the last two weeks, cooked food from Anganwadis is being delivered to children and other beneficiaries in their houses. Besides, special food kits are going to be supplied to all families in Kerala in addition to the normal ration. Another novel program is the Community Kitchens organized by the local governments. Rs 20 meals will be available for takeaway from hotels attached to the kitchens. There will also be arrangements for home delivery. Local governments will prepare a list of families who cannot afford even this amount, for whom meals would be delivered at their doorsteps free. Street pavement sleepers will be accommodated in Kalyana Mandapams and given free food. Migrant workers will be ensured food at the place of accommodation in partnership with the contractor. It is the duty of the local government to ensure their health and food needs.
Who is to run and manage this chain of hotels and kitchens? Kudumbasree, a network of women neighbourhood groups with membership of 32 lakh families, already manage 1,479 Kudumbasree cafes and 946 catering units as part of their micro-enterprise program. The state and local governments will finance and provide material support for the program in order to ensure that their enterprises do not suffer.
Kudumbasree has a track record of more than two decades in micro-finance and a repayment rate of 99 percent. This credibility will be leveraged to mobilise Rs 2,000 crores from banks for providing additional consumption loans to member families. The state government will also provide interest subvention for these loans. This is a component of the Rs 20,000-crore package announced by the state government.
This package also includes the front-loading pf the entire 8 crore employment days allotted to Kerala under MGNREGS to the month of April and May. Kerala also has an urban employment guarantee program on a much smaller scale. Similarly, many of the schemes which directly give money to the poor are also being brought forward to the beginning of the year. We also intend to clear all arrears of scholarships, social justice payments and subsidies which had accumulated because of the fiscal crisis that the state government has been pushed into by the policies of the centre government. Our borrowing has been cut, compensation denied and central transfers reduced.
In the above situation, how is Kerala going to finance this package? There is no other way than to front load half our annual borrowing to the month of April. We have also been demanding the immediate payment of GST Compensation and raising the market borrowings of the State to 4 percent of the GSDP. The present policy of the centre government of enforcing a cut in the state government expenditure in a recession is crazy to say the least.
Kerala has also been the first state to call the State-Level Bankers' Committee and reach an agreement of a moratorium for all loan payments for a year. We have also demanded a special package for sectors severely affected by COVID-19. The RBI has not yet responded. I hope the RBI will wake up and at least take into consideration the guidelines issued to lenders by the Federal Reserve Board of the US and Finance Control Authority of the UK in the wake of COVID-19.
Besides this immediate support to the Covid-affected, Kerala is also rolling out a Rs 50,000-crore infrastructure investment program funded by the Kerala Infrastructure Investment Fund Board. This fund by legislation is to receive an annual grant of half the Motor Vehicle Tax and a special cess on petroleum products. The fund borrows through securitising its assured future revenue flows and finances infrastructure. Projects estimated to be around Rs 50,000 crores have been declared in past budgets and are now ready for implementation. Projects worth nearly Rs 20,000 crores have already been tendered. The rest willd follow soon. This by any standard would be the largest anti-recession package of any state government in India.
This is how, within the limits of federal polity, the government of Kerala is trying to defend its people and economy in these difficult days of the Corona epidemic.
