“Now is the time to scale compassion.” Tarun Cherukuri on mobilising India’s welfare state to protect the vulnerable
COVID-19 poses a disproportionate threat to India’s most poor and disadvantaged citizens. I interviewed Tarun Cherukuri to understand his perspective on the politico-economic and welfare responses to the crisis.
Tarun is the Founder CEO of Indus Action, a public policy do-tank whose mission is to provide disadvantaged families access to their legislated rights. He is also an Obama Foundation Fellow and DRK Foundation Entrepreneur. He graduated from the Harvard Kennedy School in 2013 with a Masters in Public Administration in International Development. Tarun is an alumnus of the Teach For India fellowship and member of the organisation’s inaugural cohort.
The following is a transcript of the interview that has been edited for brevity and clarity.
Q. While India’s three-week lockdown is an important and necessary public health measure to suppress the spread of the virus, what are the economic consequences for India’s poor?
Tarun Cherukuri: Moody’s came out with a prediction yesterday that India’s growth rate will be scaled down to 2.5% for the next [financial] year. This is more than a 50% drop from the earlier 5.3%. That is quite alarming because every 1% of growth is associated with several million people being lifted out of poverty. For example, in the decade of India’s growth between 2005/2006 and 2015/2016, when we experienced a CAGR [Compound Annual Growth Rate] of approximately 6–7%, we lifted 271 million people out of poverty. That was the fastest upliftment rate in that decade. The recession caused by COVID-19 is going to put a huge spanner in our poverty alleviation efforts and what that means broadly is quite significant.
At a big picture level, as of 2015, around 82% of male workers and 92% of female workers in India earned less than Rs. 10,000 [$130] a month. This recession will put millions of people at risk in terms of their access to safety nets.
Q. What are the short-term implications for India’s poor?
A. There are a few levels to this crisis. On the first level, we haven’t planned this well and put a lot of people at the risk of either starvation deaths or lack of nutrition security leading to further malnutrition, anaemia and other second-order effects. These will come about through a lack of access to food.
On the second level, the numbers [of infection and deaths] are going to escalate because we haven’t provided for the safe measures required during the lockdown. There are videos circulating of migrant labourers walking home, which is absolutely inhuman and reflects a lack of planning. My sense is that will lead to an increase in the spread of the virus in India, similar to what we’re currently seeing in the US. We’re already in [the phase of] community transmission and don’t have the supply chains required to ensure a [sustained] lockdown. I think we’ve missed the boat of stage 2 and are already in stage 3 but the numbers are artificially low because of low testing.
Once testing actually ramps up, it will be very hard for the numbers to be maintained and we will have to go into an isolation strategy, identify hotspots, isolate those pockets and ensure food and medical safety for those pockets. This will once again be a supply chain issue as once the numbers go to millions, we don’t have the health systems to maintain social isolation and lockdowns. That will have economic consequences for the most vulnerable as well. The people most hit by the food supply chain breakdowns and medical supply chain breakdowns will be the poor. While the privileged have the means to negotiate the crisis, the delivery workers and frontline entrepreneurs navigating the lockdown and police will be taking huge risks of being exposed during a three-month period.
Q. If we need to extend the lockdown, what are the potential enduring consequences?
A. After three months, there will be third order effects in terms of food production and economic activity, which will affect our supply chains at the source and lead to a supply-side contraction. On the consumption side, there will also be a contraction and we will have to see how the liquidity effects play out if people do not have enough cash in their hands. Empirical evidence suggests that if the stimulus package is ramped up to Rs. 5 lakh crores [$66 billion], Rs. 2.5 lakh crores will reach people in their bank accounts and hands in the next 6 months but the other Rs. 2.5 lakh crores will get stuck in the pipe based on India’s current state capacity. That would mean that the Rs. 2.5 lakh crores will take time to reach the intended beneficiaries and that will lead to a demand contraction as well. This will translate into real shocks for poor people in terms of a lack of cash in hand leading to starvation, depletion in nutrition and depletion in productivity, and hence economic activity.
If you add a layer of social distancing to that, there will be a third or fourth order effect of biases and prejudices playing out in terms of economic activity. People will place restrictions on with whom they are willing to exchange goods and services in the care economy from sanitation work to domestic help work. Without accurate information, people have their own takeaways about how to look at social distancing and unfortunately, this will translate into social prejudice. If people are from low- and middle-income backgrounds, they will incorrectly be looked at as being more likely to have the virus.
When community transmission happens, the poor will be the most susceptible and vulnerable and this will no longer be a rich person’s disease, as it is right now. Privileged people, in spite of their networks are currently facing social ostracism from their housing societies if they have returned from abroad or show signs of symptoms so I can only imagine what will happen to people with less social and political capital. I think we’re set for a fight for the long haul and prolonged periods of disruption to everybody’s lives and organisational models.
Q. That is an incredibly sobering perspective and provides an opportunity for us to turn to the social safety net that we have in place. How do the poor gain access to what you at Indus Action call a “rights portfolio”? Can you share what schemes we have in place that could be effective just now in preventing poverty shocks?
A. Systems in place include rations [through the Public Distribution System], Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA], pension schemes, cash transfers or any other direct benefit transfers through Jan Dhan accounts [as part of the National Mission for Financial Inclusion]. For example, these involve cash transfers to construction workers and even farmers through PM-KISAN [Pradhan Mantri Kisan Samman Nidhi]. All of the existing welfare infrastructure will have to now be adapted to solve for the last mile.
Q. How do citizens avail of benefits through these schemes and what does delivery currently look like in the last mile?
A. Consensus amongst economists suggests that we need Rs. 10 lakh crores [$130 billion] as part of a relief package. As a thought experiment, say we’ve got that amount of money into the bank accounts of beneficiaries. How do we imagine beneficiaries collecting this money? If the assumption is that people have to queue up at ATMs to get their money, there will obviously be a breakdown because of the need for social distancing. So we know that just like for food, we have to figure out doorstep delivery for direct benefits and cash transfers. Either that needs to be solved, or structurally, we need to figure out how to get more people to adopt a digital economy, which is not going to happen immediately. In the shorter-term, doorstep delivery has to be innovative.
Kerala is showing us the way through activating local panchayats, giving them money. Distribution is currently too centralised, where the centre is focused on pet schemes and PR benefits of various schemes. The only way the infrastructure will go out is if every panchayat gets a direct benefit transfer immediately. All panchayat’s bank accounts should be flush with cash right now and they should quickly decide how to allocate money to the most vulnerable.
Q. What are some of the challenges posed by excessive centralisation of power with respect to welfare delivery during the current circumstances?
A. There’s considerable empirical evidence for the challenges posed in terms of the leakages in the system. My friend, Rajendran Narayanan is a professor at Azim Premji University and statistician. He has analysed nearly 4.5–5 lakh MGNREGA transactions over the last few years. He finds that while the government claims that 90% of delivery has happened, that only includes payments being triggered at the central level. He estimates that only around 30% of beneficiaries who have been engaged in rural works receive their benefits in their bank accounts. That means there is a difference of 60 percentage points between the government’s claims of triggered payments and the receipt by the actual beneficiaries. The rest of the money is still in the pipeline. Turning to the current Rs. 1.7 lakh crore [$22 billion] relief package, we run a huge risk with transfers taking place from the central level because it leaves out far too many beneficiaries.
The situation is the same with the Pradhan Mantri Matru Vandana Yojana Scheme that we work on directly at Indus Action. It’s a Rs. 2,500 crore [$340 million] scheme and when you analyse it, out of the 4 mandated instalments, on average the pregnant mother gets 2.5 to 3 instalments. It’s very rare that anybody gets the last instalment. The first instalment is typically received after 245 days, which is in the eight month [of pregnancy]. Here is a scheme that is supposed to put money in the hands of the pregnant woman so she can spend on richer calories. Instead, she is only receiving the benefit in the eight month even though she is supposed to receive it in the third month.
The rights-based welfare framework has to undergo disruption. I don’t think the existing assets like Jan Dhan accounts and Aadhaar need to be dismantled but we have to ensure that they are leveraged for doorstep delivery and last-mile connectivity.
Q. State governments in Kerala and Delhi are being lauded for the measures they’re taking to protect the most vulnerable citizens. Can you talk through what steps they’ve taken effectively and the enabling conditions for them to take these steps?
A. A key thing is that they have learned from experience. Looking at Kerala in particular, with their response to the Nipah virus [of 2018] and cyclones, the state has become more resilient to disaster and emergency response. Through realising that Kerala is the most vulnerable state when it comes to climate change disasters, their leaders have built capacity and muscle through investing in response systems. It’s not like the Chief Minister Pinyari Vijayan has suddenly woken up as an enlightened leader, even though the media is portraying it that way. If you look at the case historically, prior disasters have considerably informed his understanding of how to deal with effective responses today. These past challenges took place when he was in the opposition government and he has rightfully given credit to past ruling governments for the role they have played in building the muscle for Kerala’s current response.
If we’re to codify the Kerala playbook, the first step is for ruling and opposition parties to come together, and Kerala really comes together across party lines in a time of crisis.
The second thing they do really well is that they demonstrate political leadership through being on the ground during a disaster ensuring food rations are provided or anganwadi and canteen workers deliver food at home for children [since mid-day meals are no longer accessible in school]. Every day, the Chief Minister and Health Minister are transparently speaking about the current status and being open to questions. This is a great signal, which we’re now seeing in Delhi as well, through open press conferences that allay the fears on a daily basis. As a result, the problem-solving posts have also shifted from food rations to nutrition to generating employment and mass delivery, which they’ve done through anganwadi kitchens. They keep increasing their locus of care and concern and are now even looking at food safety for stray animals.
The third piece is civic capacity. Once there is a responsive state, society will lift up as well and go beyond symbolic gestures and activities of support.
Q. From a governance standpoint, what are some of the constitutional features that can enable effective local responses?
A. I think this is a great opportunity to fully execute the 73rd and 74th amendments [of the Indian Constitution] with respect to decentralisation and self-governance. This will mean money being distributed as locally as possible, so citizens and elected representatives can make their best financial distribution decisions in hyper-local communities.
Q. Turning to the response of citizens, we’re seeing a lot of NGOs and private individuals stepping forward. This humaneness and spirit of generosity is a positive sign but there’s only so much that can be achieved through this. People want to help, but part of human nature is gravitating towards what’s visible and tangible. How do you think citizens can play a role in the longer term?
A. In the value pipeline, the first step is the source. This is the collection of funds through taxes, people’s contributions to PM relief funds and CM relief funds, and philanthropists and celebrities making donations. This is increasing the share of money we have to fight through the crisis. We all need to be generous with whatever resources we have. If someone like Azim Premji can put Rs. 50,000 crores [$7.5 billion according to 2019 INR-USD exchange rates] into philanthropy in the course of one year, that is a huge signal to other billionaires and philanthropists to come forward. These donations fall into the category of improving the denominator of sources that we have.
At the end of the value pipeline is the palliative efforts of crisis-response. This involves providing food, masks, and testing equipment. The private sector could play an important role here because it’s good at last mile delivery. Companies like Big Basket, Swiggy and Uber could contribute spare capacity to this humanitarian response.
But there is a huge missing middle. Once the money is with the government or a certain non-profit, after a month if people get back to their respective roles and jobs, the palliative efforts will die down. Once the news cycle moves on as well, the fire about the virus and poverty shocks will not be apparent. This will lead to the impression that the flames are doused. This is dangerous because there will be a huge drop-off of both funds and palliative efforts. If we get the ideal welfare package or stimulus or Rs. 10 lakh crores [$130 billion], half of that might get stuck and may not make it to the beneficiaries. People don’t see the middle work of ensuring delivery as being cool and sexy. Perhaps because Indus Action focuses on delivery, this is where I spend my time and energy.
Q. How can citizens be working towards building accountability from their elected representatives? How can citizens put pressure on the government to mobilise welfare distribution?
A. This is how we’re thinking about this at Indus Action. We’ve applied for a grant to build a national dashboard with a backend of a national helpline where we collect grievance data that enhances the capacity of citizen journalists. We hope to have 10,000 citizen journalists who can participate through the helpline and field outreach. They can pick up as many cases as possible of the gap between the promise and actual receipt of claims. We’re planning to publish a representative sample of data on a daily basis about schemes that are working well, and those which are not. This will allow us to keep high vigilance and accountability levels by putting out data on a national level.
Ideally, Indus Action should not have the monopoly on this civic action. We’re hoping to trigger this and will be glad if we’re not the first organisation to do this. We plan to open source as much as possible and maintain this backbone infrastructure.
Q. On a hopeful note, what are some lessons from this crisis that can be used to build long-term state capacity for social safety nets?
A. Ideally, if we learn from this crisis, social issues should receive about 12% of GDP: 3% for health, 6% for education and 3% for social security. This crisis has shown how we need to invest more money in emergency responses and public health. Investing 1% of GDP in public health is a joke. In terms of education, we’re seeing how fake news and illiteracy really has deleterious effects during pandemics and other crises. After this pandemic, if we don’t re-prioritise our social spending, the crises will only keep repeating. We need to broaden the source of the funnel and invest in institutional capacity for the long run.
Flowing from the money, is the idea of bringing in the right talent. Ideally, the best minds should be going into health, education and social security, but that’s not the case right now. The government’s high-achievers typically go into finance or defence services, and those are considered cool postings. I hope that as a result of this, a lot of people apply for public health degrees and IAS officers and bureaucrats go into health postings. But this will only happen if there is more effective channelling of funds. This is a good opportunity to disrupt decentralisation structures and allocate more funds and functions to local levels. And more people need to run for local office. The Ministry of Women & Child Development, health and social welfare ministries should be run by women. If I had a diktat, right from panchayats all the way to parliaments, I would have women run welfare related ministries.
Q. Until now, our conversation has focused on what India can be doing utilising existing schemes, public funds and economic considerations. From a moral standpoint, what more do you think society ought to be doing as part of our response to the crisis?
A. While this crisis will result in conflicts at all levels from the family to the international community, now is the time to scale compassion. Just before this crisis, the Delhi riots happened. Even before that, we had all gone into different liberal and conservative silos and found ways to fight each other. This crisis will help us realize that the virus knows no boundaries in terms of nationality, religion, caste, class and sexuality. This presents us an opportunity for compassion and solidarity. Now is not the time for borders, prejudices and biases. There is no joy in seeing the U.S. healthcare system fail or making China the scapegoat in terms of geopolitics. In fact, the government as a whole and citizens as individuals should show that we are bigger than our narrow identities because this affects all of us and we are all interconnected. In terms of the mechanisms, I think we should look to art and other creative ways to bring people together. At Indus Action, we’re trying to put empathy and compassion at the centre, and then bring in the transactional elements regarding getting the system to deliver what it is supposed to.
Addendum: Indus Action’s COVID-19 rapid response proposal and volunteer request.