Envisioning a new India post Covid-19

Satwik Mishra | Updated on May 12, 2020

With respect to public goods, focus should be on building a robust social security net which ensures equality in access to quality education, healthcare and an equitable living wage

Some of the most developed nations built their welfare programmes when they were going through a crisis. After World War II, the UK, at its poorest ever in recent history, adopted the National Health Service. Sweden began its welfare programme “folkhemmet” in 1930s when it was facing acute food shortage and an unemployment rate of 25 per cent. The prosperous Basque region of Spain universalised delivery of healthcare under its “Osakidetza” institution in 1980s while still recovering from political turmoil.

Covid-19 brings an opportunity to imagine a new vision to build Indian State capacity — a structural re-imagination that makes it minimally interventionist in the market-economy and maximally efficacious in roles where markets aren’t the optimum answer.

Since the resources with the state are limited, they should be used extremely efficiently. Kelkar and Shah in ‘Art and Science of Policy Making’ argue that the marginal cost of public funds (MCPF) to society is ₹3 for every ₹1 spent. This is because any programme implementation inevitably includes implicit costs of administration, compliance, interest payments, etc.

There are two broad ways of reducing this MCPF. One is the reformist route — GST, IBC, DBT, etc. — continuously being escalated by the Government. The second route is to consider a new vision for the State — to strategise for delivering outcomes in some specific sectors where the State’s intervention is indispensable. In other words, a structural design for “Maximum Governance, Minimum Government.”

Building, designing for excellence

Priority should be given to ensuring rule of law and tackling market failures through efficient delivery of public goods, fixing information asymmetry that erode just transactions, negating monopolies that distort market, limiting negative externalities like pollution and promoting positive externalities such as hygiene. With respect to public goods, focus should be on building a robust social security net which ensures equality in access to quality education, healthcare and an equitable living wage.

Firstly, there should be a precise identification of desired outcomes. Secondly, the State should provide the physical infrastructure and requisite policies for achieving these outcomes. For this, the State may collaborate with the private sector. Finally, focus should be on facilitating innovative solutions to deliver these outcomes.

An example to understand this model is the GPS technology. Easing navigation was the desired outcome. Satellites, sensors, mobile phones were the required infrastructure. Ultimately, an enabling environment for innovation led to apps like Aarogya Setu, Google Maps, Uber, etc., that ensure well-being for citizens.

What will the model look like?

For better enforcement of rule of law, the long-desired outcome is a robust law-enforcement system where the police force is equipped to maintain order and the legal system is universally available, accessible and affordable. The State should meticulously identify and design conducive policies such as the Data Protection Framework currently under consideration in Parliament.

It should invest in technologies augmenting police operations such as facial recognition, improve the police-person ratio as per the UN recommended 222:100000, and also leverage technology within the legal system. Innovative solutions such as Roadeo robot for traffic enforcement in Pune, Singapore’s e-Mediation system for online dispute resolution, judicial hearings being held online, legal research through platforms such as ROSS could then be the norm instead of being siloed best practices.

In order to tackle market failures, the outcome desired should be a fine balance between regulation and supervision. The former shouldn’t be so excessive that it thwarts innovation. The latter shouldn’t be so minimal that it allows misuse of freedom. Innovation and regulation are often considered binary opposites. The new vision of state should bring forth regulatory practices that incentivise innovation. This would require investment in capacity building among the regulatory personnel, creating Early Warning Systems for data capture and analytics, as also creating specialised integrated regulatory institutions.

Regulators should avoid reliance on outdated laws, rules, regulations that haven’t been originally conceptualised to deal with novel interventions of entrepreneurs. They should innovatively collaborate with entrepreneurs to understand the implications, risks and benefits of their products.

The European Union has conceptualised “Innovation Deals” for identifying state processes which hinder entrepreneurs from bringing valuable products to society. Such solutions should be envisaged collaboratively by the State and private sector. Market failures by definition require State intervention. However, the nature and design of this intervention should be facilitative instead of interruptive.

A sound social security net for the vulnerable is an inevitable responsibility of the State. When all else sits, it is the State which must stand. To ensure eminent improvement in every individual’s daily life, an outcome-based education, preventive and curative healthcare and finally an equitable wage are crucial. Here, investments in Artificial Intelligence, blockchain, robotics, quantum computing facilitating Ed-Tech, tele-medicine and digital banking should be an ongoing endeavour.

Simultaneously, there is a need to focus on policies for continuous upskilling of educators, healthcare professionals and bankers for bolstering their productivity and enhancing outcomes. Think of doctors using IBM Watson to diagnose patients, teachers using curated personalised lessons for developing critical thinking and emotional intelligence amongst students and bankers using cutting-edge technology to comprehensively enhance financial inclusion.

At the administrative level, the State should envision an integrated list of beneficiaries. Using Estonia’s X-Road as a model, a secure data exchange layer could be established where the Union and state governments’ beneficiary lists could be integrated and then utilised contextually. This could facilitate seamless transmission of living wage for poverty alleviation, dealing with economic shocks, disaster relief, etc.

The future of India will greatly depend on the choices we make during this pandemic. Nations have used crises to build and design a new vision of their State. The Indian State can be envisioned anew as well, prioritising and strategising to deliver excellence in sectors which most require its presence.

The writer is Young Professional - Governance and Research, NITI Aayog. The views are personal

Published on May 12, 2020

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