Let me begin by asking you about that mega financial assistance that the World Bank has given to India. Help us understand if this is milestone-based, and in which areas will this financial assistance be used for?
This is a major partnership with the Government of India to fight the Covid crisis with the guidance of the Ministry of Finance and the leadership of the Ministry of Health. We have put together a billion dollar program to support the government of India in and in record time in literally 12 to 13 days this program has been developed. Its focus is very-very clear. It is on the health sector.
It is to help India deal with the issue of detection, the issue of testing, the issue of screening, the issue of supporting its laboratories, the issue of doing research for vaccinations, the issue of investing in protective gear, which is so important at this stage both for the front line responders and for the general population, as you know the issue of getting mask to everyone, getting private sector-public sector to actually begin to invest in building ventilators and other equipments or importing.
So this billion dollar is really to support the whole health system to respond to the health crisis. But it is also a very flexible loan in the sense that if government today felt that its community surveillance, disease surveillance that was critical, it could shift all the money into that area or if it felt the real story is really creating a surge in the production of protective gear it can use the money to build that. It is really about the public health system respond to the Covid crisis.
It is great that you have pointed out about the public health system and looks like there is a lot that we can do on that front as well. But let me get you on the fact that here in India, while the government is doing all that they can to ensure that emergency facilities are set up, we are still lagging in many areas, which is why there is a need for private sector intervention as well. In your interaction with the industry and the government, how are both stepping up during these times of Covid-19?
I think it is something very important to recognise here. The 2008-2009 global crisis was the financial crisis, and the immediate response was let us do an economic stimulus and when you do an economic stimulus, you get public sector investment, private sector investment going up.
Want to publish your own articles on DistilINFO Publications?
Send us an email, we will get in touch with you.
This is a supply shock into the system and that supply shock is through heatlh. So you have to address the supply shock itself, the health sector directly and what we have learnt in terms of dealing with the health sector is that you have to actually figure out a way to stop the spread of the disease. So the detection, the testing, community surveillance, etc, but if you do that, you have to slow down the economy. Now that is very-very unusual. So the response to helping the health sector to slow down the economy and then over time as the health sector rebounds, you then want to create a stimulus on the health sector and in between the bridge is a bridge to provide social protection to vulnerable communities and to small and medium enterprise to actually bridge over this slowdown and as government goes through the lockdown.
Now coming to your question, what is important in this framework of health sector intervention, a bridge to stabilise both households and firms and then eventually go into the stimulus, you need state coming in a big way and that is happening everywhere, and then you need to complement it with private sector coming in, in terms of the surge. So your point is exactly right that this partnership between state and the private sector is something that will be important to bring in surge in capacity. India has ability to manufacture, retrofit and manufacture ventilators, testing kits. It has the ability to put money into research in vaccination, which it is doing right now. That is where I think this public-private partnership the complementarily becomes extremely important.
Source: ET MARKETS
