Corporate Governance

India – after COVID-19 came to stay!

India – after COVID-19 came to stay!

On April 14th, the PM extended the lockdown to May 3rd. India will be under a country-wide lockdown for more than a month – with a possible extension to this too.

Soon after the lockdown was first announced, I wrote an essay attempting to prognosticate on the after COVID-19 scene. In that essay, I made 3 points –

  • COVID-19 has come to stay. It is not going away anytime soon.
  • There could be more pandemics, sooner than we have seen in the past. The last three, including COVID-19, indicate a reducing time-gap between occurrences. The past is not always an accurate means of predicting the future, but that’s all we have to go by for now; so rather than look at such occurrences as likely Black Swans it would be better, for humanity, to prepare by planning for them to occur more frequently than in the past.
  • The visit of COVID-19 could change the way humanity lives, permanently and significantly, in a relatively short time frame of a decade or less. The years till 2030 will change at a pace that is much faster than the pace of change we saw in the last 40 years or so. We explored 21 likely global changes in 3 categories: Protective, Reactive and Responsive. We will explore some of them in greater detail, in later essays.

In this essay, we will discuss a different aspect – what this could mean for India, since this is the only nation we can claim to know. The next essay will address another aspect – what this means for individual Indians.

For all the vagrant assumptions about likely decision-making in India, we saw the example of a Prime Minister taking a bold and possibly risky step of a nationwide Lockdown of the second largest populous country, before any other nation on the planet. Three opposition chief ministers have echoed and followed this by extending the date of the lockdown in their states. His leadership will carry the nation forward for the foreseeable future. This is my assumption for how I see India moving forward over the coming decade.

Over the last 12 months, elections in India have been a great indicator of how the Indian psyche works. We have elected the BJP to power with an even greater majority than in 2014. Equally, decisively in several state elections they have been shown the door. More recently, last month, when the PM declared a nationwide lockdown, the vast majority of citizens complied of their own volition, knowing the accompanying pain this will entail – from daily wagers to large business owners. Even as we see extensions being made, few sought excuses or sops for complying. The two nationwide gestures sought by the PM also met with fulsome, positive response. This allows me to assume that ordinary Indians will be pragmatic and open to change, as circumstances demand. COVID-19 coming to stay is a large fact of life. People will not run away from this fact and its repercussions. This is what I will assume.

This is a national crisis, brought upon us by events beyond our borders and control. It is a watershed opportunity to bring about change faster than would otherwise have been possible. This is how our leadership is likely to see this. Citizens will broadly accept the approach, co-operate and support. Therefore, we will expound on what we see evolving over the coming decade.

To discuss changes in the nation, we will use the same structure:

Protective:

– Medical response and health assurance:

  • Arogya-setu will be the first step in building a transparent nationwide Health Database and reporting system for all citizens. The government has so far restricted the use of the app to warnings about Covid-19, but over time, the app could begin providing data to citizens on overall healthcare measures and metrics. This will potentially prepare us to respond far better to both individual health issues as well as epidemics/pandemics. As an add-on, there could be a database of hospitals (government run or PPP) that will improve healthcare access for the poor. The app will see multiple further enhancements, starting with making it multi-lingual and morphing it into a EMR/EHR/Medical Service access including use of tele-medicine. Integrate the India Stack, and we have a veritable nationwide healthcare system. PPP for healthcare has been a relative success in the NHS, UK. It has also been successful in India, in infrastructure spaces like airports, highways etc. We believe healthcare is poised to take advantage of PPP and will do so. The Govt of Maharashtra could be among the first State govts to do so. The existing BPL benefits overlaid over this will ensure the poor get subsidized or free treatment.
  • As a corollary to the above, government will become the provider of capital/ opportunity and a regulator while the private sector would handle the implementation. The medical profession would be pushed into modernization, standardization and process improvements, by bringing in best practices that are working well in both public and private institutions. Self regulation through the IMC will be replaced with an independent regulator, like SEBI /RBI/ IRDA for the financial sector, covering a wide range of institutions like hospitals, clinics, labs, gyms, yoga centres etc. Alternative medicine like AYUSH will be embraced as well. The Government will set up many more medical/nursing colleges, nursing colleges and medical research institutions, and encourage private institutions too.
  • It is also likely that a more stratified system of healthcare professionals (from Doctors down to Asha workers /VRWs) would be created with more levels in-between to build a cost-appropriate, responsive and accessible system. This will be accompanied by a certification system like in the UK (FRCS/FRMP) and an ongoing education & training system for updating knowledge of both Doctors and support professionals (nurses, etc.). A certified, robust, organised network of such a workforce, using PPP or models like SHGs will evolve by 2030.
  • Pharma research would be given all possible support to encourage vaccines and drug development, including for indigenous formulations based on ancient Ayurvedic texts, which have hitherto been used only by overseas drug majors like Burroughs Wellcome, Glaxo and others. This is already being done by the Dept of Science and Technology.
  • Swachh Bharat Swasth Bharat linkage would be established and developed to ensure our basic infrastructure around sanitation, civic cleanliness (including waste management), water and air quality is brought to a standard that will become the envy of the globe. Existing examples from within India (Indore city) and globally, and government funded innovation around these issues, would become models for this round of changes.
  • Citizen participation and enrollment will be enhanced using models like Mohalla committees (concerned and alert resident citizens) or panchayats.
  • Wellness oriented Health Protection & Assurance, starting from school, going through colleges and employment. Health and Sickness Insurance would be predicated upon health maintenance. Better health would be rewarded with lower premia – measurable by apps of the type mentioned above.

– Energy:

  • Energy security through self-sufficiency will become a key and urgent concern. Government is already increasing support for Solar Power. All energy sources that are alternatives for fossil fuels will be promoted. Geography-based advantages such as Hydel, Wind and Solar will be pushed by the Central Govt and co-operating State Govts. ‘Different’/ innovative ideas like Bill Gates’ new and safer Nuclear plant design or thorium run reactors, could be sought. Technologies for more efficient energy generation with minimal waste and by-products will be promoted in both Public and Private sectors.
  • Strategic Stocks of Coal, Oil and Gas would be built to reduce dependence on external entities. India will target to be independent of external energy sources by 2030. Energy storage technology, manufacturing of batteries or similar products/systems (viz., fuel cells) will be encouraged.
  • Along with Carbon-neutrality, business (or any enterprise) will be encouraged to become energy-neutral at earliest. Energy contribution to the grid will be incentivized

– Food and Water:

  • While food production and stocks are already adequate to take care of the needs of our population, we lose 40% of it in distribution. Government has started creating a more robust storage and distribution system for perishables using PPP. It will continue to create the necessary digital and physical network.
  • Water is the single most critical and non-importable resource. Our river system will be connected, and irrigation systems created without resorting to large and potentially ecologically damaging construction. Overlapping water-based surface transport, like the Sagarmala project, will allow the costs to be amortised over multiple avenues.

– Information Ubiquity and Security:

The government, armed forces administration and many other sensitive arms have now been working remotely, forced by necessity. So have a lot of private sector entities. The existing solutions are not home-grown and carry a large security risk. India has enough technical knowhow and workforce to build such options for itself. The government, through the NIA, NIC and similar entities, in collaboration or PPP mode with local private ventures, will invest in creating infrastructure and solutions for use in its internal apparatus. Eventually, the infrastructure will be opened up for private parties to build citizen facing applications. Such applications will become the interface to access government services seamlessly. We can expect this to happen in quick time. The Smart Cities Initiative will end up riding on this infrastructure.

Reactive

– Urbanization Model 2:

  • Human Settlements – consisting of combinations of abodes and work-places will become smaller than was so far appearing to be the trend. Mumbai and Delhi will reduce in population density and absolute numbers. No new cities of these sizes will form. Singapore will become the model emulated by cities and towns across India. Rules that will become common will include – ‘spitting or littering will be fined’. Separation of garbage into wet and dry will become a no-argument necessity. High standards of Civic cleanliness will be maintained – a la Indore – as is already visible.
  • Sustainable and intelligent buildings, architecture and living systems will find markets and will even receive Govt financial support and tax breaks. Offices and factories will develop with inherent social distancing. The same will likely hold true of restaurants and social gathering spaces.

– Business and Economy:

  • Businesses will actively look for long term cost cutting measures and now
  • become more widespread leveraging lower costs of Tier II and III cities.
  • Reduce office space by encouraging work from home and multiplexing space for its teams across the week. Packed offices will be spaced out for social distancing.
  • Reduce travel and conduct more meetings online.
  • A large part of the cash economy will go digital, eventually entering the formal economy thus increasing compliance and tax base.
  • The home delivery market opportunity that has opened up will affect retailing and remove some layers from production to consumer. This will lead to greater profits for the producers and maybe cash savings for the consumers. This will also spawn a market for service providers who could take small retailers online.
  • Need to cut costs and improve delivery will cause small enterprises to be formed for the last mile. Such enterprises can employ between 5 to 15 local talent that will build a job creation engine countrywide.

– Education:

  • All education will become dependent on Network and Computer based access. The entire approach would have to keep in mind the need for social distancing. Primary education will be conducted in the child’s home (with either parent being the ‘teacher’) or close to the home in small groups with few teachers for the entire cohort.
  • Education will become more democratized with more governmental support for the NGO sector to take education to the doorstep for the poor. Primary schools would be small (typically less than 100 students) and they would address dwellings of a locality / sub-locality, from standards 1 to 5. There would be one teacher per class, required to cover the entire syllabus for the class she is teaching. Here, the emphasis would be on helping children ‘learn how to learn’.
  • Focus will move to developing children’s curiosity, helping them find their pace and style of learning, ensuring some rote learning while encouraging discovery, appreciating art, learning one or more sports, basic hygiene and taking care of your health, working with your hands and your mind, solving problems, relating school learning to life outside school.

– Geo-politico-economical change:

  • The pandemic has thrown businesses worldwide out of gear due to their dependency on China.
  • Global businesses will want to move away from China. Japan has already set a fund aside for this. India will be the biggest beneficiary of the investment and outsourcing. This will entail:
  • An articulation of an investment friendly long-term stable policy.
  • Creating single window easy to operate mechanisms to reduce friction for such investments
  • Easier interaction mechanisms with implementing agencies like customs to reduce operational friction.
  • A more dependable and robust banking system.
  • Marked reduction in corruption in government offices.

– Public and Bulk Transport:

  • This is a critical part of both personal and business travel and is the one most prone to spreading communicable diseases. This would also take reasonable time to change.
  • Public transport will undergo dramatic change – airlines are already booking seats with alternate seat occupancy. This may not work for too long for airlines to stay viable at current costs of aircraft and fuel.
  • Even with increased distance between seats, the single environment which is today common to every traveller in a box – whether bus, train or plane – will need to change. This will require innovative solutioning because personal transport does not appear to be a viable alternative in the medium term.
  • By 2030, water transport for both people and goods will become routine. Large transport will become electrically driven earlier than cars.

Responsive

– Rural Economy Change:

  • Agriculture will become a normal business like any other. Risk is a fact of life and business. Agriculture, like any other business, will learn to understand and factor in risk. Farmers, like other entrepreneurs, will start looking for ingenious solutions to address the issues they have hitherto always looked to the Almighty and Her local representative – Mai baap Sarkar – to resolve. This will lead to consolidation or cooperative based aggregation to defray risks and professionalise better.
  • Farmers Production Companies for bringing funding, for creating produce storage to ensure better pricing, to create processing plants that would add value to raw produce – all of which would increase farmer income would be some of the many innovative solutions farmers will adopt and government will support.
  • Slowly but surely, farm subsidies on all inputs will be reduced to zero. Even guaranteed pricing and government procurement may go.
  • Crop measurement and management using Satellite-technology leading to presumptive income-tax may become normal.
  • Migration of labour may reduce due to better income opportunities in rural locales. This will also be welcomed by political parties since migrant labour is usually ‘vote-less’ and therefore, less interesting. Factories may shift to Work From Home (WFH) methods where they can move that way. ITES activity has started moving into the hinterland. Cost advantages will ensure factories move towards and into rural India – either wholly or in processes that can move. Artisans and craftsmen too would find markets for their produce, on the net, rather than required to migrate to urban areas.

– Personal Transport:

Inexpensive Electric Personal transport will become ubiquitous countrywide by 2030. Cycles, motorcycles and scooters could become electrical even earlier. Electrical charging infrastructure will become normal within the coming 4-5 years, slowly replacing petrol as the fuel of choice for the majority of personal vehicles.

– Population Management:

Family planning will return – with disincentives or at least ceilings on facilities beyond 2 children per family. China’s norm of single-child families has taught them and the rest of the world that single children make for lonely (and less happy) children. However, society will slowly and surely become unwilling to take on the responsibility of more than 2 children to a family – especially in a large country like India. Parents will need to make personal commitment to provide for more than 2 children till they become productive citizens.

Authors :

Devdutt B (Sunil) Modak with Mohan Sundaram

(2) Comments

  • CN Bal Tue Apr 21 2020

    An excellent analysis of the fallout of COVID 19. Lockdown and social distancing will not kill the virus but will reduce the numbers to be treated. The decision to apply lockdown and social distancing was a path breaking one requiring strong will and determination. Our PM showed both. It’s effectiveness however depended on the cooperation of the people. All actions henceforth would need a balance between life and livelihood. Possibly we may have turned the corner can contemplate actions for a more practical and balanced approach to living and livelihood, as suggested in this essay. Civic cleanliness would call for an attitudinal change in mindset of the people.

  • Shailendra Phatak Wed Apr 22 2020

    Very comprehensive analysis of the situation and opportunities.

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