Back in the shortage economy

India has recovered from extremely trying crises in the past, with sincere and competent leadership 

We have been witnessing shortages of almost everything needed to treat COVID-19 patients: hospital beds, drugs, ventilators and, above all, oxygen. The world has taken note, and offers of help have come in from the U.S., the U.K., the European Union, and even China. India is once again the focus of global attention, as it was in the mid-1960s when two consecutive years of drought resulted in a severe shortage of food. Then, India had to turn to the U.S. for assistance. This did arrive, but grudgingly, for India had not supported the West during the Cold War. The lore is that President Lyndon Johnson had directed: “Send food to India by the shipload, so that she is kept on a short lease”.

Though that moment in our history is not a happy memory, that of the response of the country’s then leadership is inspiring. Prime Ministers Lal Bahadur Shastri, Indira Gandhi and their cabinet colleagues had stirred the scientific and bureaucratic communities to bring about a quantum leap in food production. This was achieved within a few years. No one imagined that India, a byword for a basket case, would be able to feed itself. The Green Revolution stands out in Indian history as a display of extraordinary accountability by the political leadership, combining resolve, humility and intelligence. We crucially miss this today.

Lessons from the sixties

Unlike the two years of drought that tipped the country into food shortages in the mid-sixties, the need for ramping up the health infrastructure could have been anticipated in March 2020 when a lockdown was announced at very short notice. In fact, the medical case for a lockdown was that it would slow the spread of the disease thus avoiding overwhelming the health system and giving time to strengthen the capacity of the health system. The lesson from the Green Revolution is that India has recovered from extremely trying crises, under the most adverse of circumstances, in the past. It is entirely possible to replicate this now, but we need sincere and competent leadership.

In many ways the task is far easier today. Now India has something that it lacked in the mid-sixties, namely, industrial muscle. It should not be too difficult to ramp up hospital beds, ventilators and oxygen supply within a reasonable time. That certain parts of the country actually have a surplus of oxygen should give confidence on this score. An additional feature today, again in contrast to the mid-sixties, is the considerable foreign exchange reserve. Therefore, some crucial medical inputs can be imported, especially vaccines. But it is important to recognise that these measures are absolutely necessary. We should not adopt an ostrich-like posture denying shortage, which the Central government is displaying on the issue of vaccines in particular.

Health spending

The inter-State variation in the death rate in India is directly related to the extent of health spending in relation to the state domestic product. It is also related to health infrastructure, but less strongly. This is also true for COVID-19-related deaths across South Asia. So, to avert a health crisis in the future the States would have to raise the level of spending on health very substantially. On average, States spend only around 5% of their total expenditure on health. Should we be surprised at the shortages we are facing now?

Finally, even as we struggle against the health emergency, a shortage that we should do everything to avoid is with respect to food. Food prices shot up from April 2020 suggesting that there may have been a disruption of supply due to the lockdown. It would be advisable to anticipate a similar disruption following State-level lockdowns now, and take all possible measures to assure the supply chain. The kharif operations are set to commence. As agricultural activity takes place at the level of the States, Prime Minister Narendra Modi needs to interact closely with their leaders and the farming community. This is the abiding lesson from the mid-sixties when we as a nation were in a similar place.