The Central Problem

In his fourth address to the nation on the COVID-19 pandemic, on 12 May, Prime Minister Narendra Modi announced a headline-grabbing Rs 20-lakh-crore economic-relief package amounting to roughly ten percent of the GDP. The package was meant to provide relief after the economic destruction caused by the ongoing nationwide lockdown since 24 March.

However, the details of the package, as revealed by the finance minister, Nirmala Sitharaman, over the next few days, told a different story. The figure of Rs 20 lakh crore included steps already announced by the government, what the people were owed anyway under existing schemes, money being offered as loans and various other elements that should not have been counted as part of a “relief package.” Neither Modi nor Sitharaman revealed when the central government would release the enormous amounts it owes states as part of their share of the Goods and Services Tax.

According to the Constitution, public health is a subject under the state list, yet the central government under Modi has sought to portray itself as the face of the fight against the COVID-19 outbreak. It has constantly taken up what should have been matters of the state governments. Decisions such as lockdown announcements and the notification of disease clusters depend on local needs and data, and state governments would have been in the best position to take them. In an attempt to look strong and decisive, the central government took these decisions instead, imposing a strict lockdown even in places where not a single case of the infection had been reported. This forced many labourers to come to the streets, making the crisis much larger than it needed to be. State governments have been in charge of public safety, law enforcement, running hospitals, implementing the public-distribution system, and running food canteens or soup kitchens where necessary. But since the pandemic began, the Modi government’s intrusion into these matter has increased. While Indian central governments have traditionally tended to encroach on the states’ turf, the present dispensation seems to have abdicated what was its most important role: to ensure that the states do not lack financial resources as their health infrastructure becomes stressed at a time of crisis.

While states struggle to finance the COVID-19 fight, the central government has been busy in grabbing headlines through exaggerated publicity of what it has done so far. On 26 March, Modi announced the Pradhan Mantri Garib Kalyan Package, worth Rs 1.7 lakh crore. On 6 May, the finance ministry said the government had credited about Rs 34,800 crore as direct transfers under the PMGKP. A bulk of this cash transfer—about forty-seven percent—was under the PM-Kisan scheme, the supplemental financial assistance that the government provides small and marginal farmers. So this was simply an advance payment for an existing programme. Another 36 percent was credited to women who held Pradhan Mantri Jan Dhan Yojana accounts.