Lockdown or MCZ for Covid control

 In March 2020, India had only a few hundred Covid cases. That is when a nation-wide lockdown was announced, giving people hardly 3 hours notice.  The economy crashed and migration pangs shook the world. It is widely believed that Micro-Containment Zones (MCZ) - an approach of localized containment of people - would have served India better.

In April 2021, India is adding about 350,000 new cases every day - with fears of it going upto 500,000 new cases per day. The Central Government is suggesting that states should prefer MCZ strategy - and adopt lockdown as a last resort. With this kind of build up of cases, is MCZ even practical? 

Many Indian states are governed by the same party as the Central Government; a few others are governed by the opposition.  The former states avoided lockdowns - and saw their cases spiral; some of the opposition-ruled states went for lockdown (by whatever name called). At least the ones that adopted a lockdown early are seeing their new cases plateau.

The writing is perhaps on the wall, and the tide seems to be turning.  A southern state which is ruled by the party at the center has finally announced a lockdown.

Wonder if the Central Government is carrying forward its learning from the past, when the ground reality has changed drastically. Time to update the tool kit?

Hindu Rate of Growth for India?

India found it difficult to breakout of the 3.5% growth rate paradigm for decades since independence.  Thus 3.5% came to be called the Hindu rate of growth.

Liberalisation in the 1990s changed the economic trajectory of the country.  Policy makers started talking of double-digit real GDP growth.  Many economists were, however, not sure about sustainability of such high growth, given the inherent limitations of the Indian economy.

The Q2 numbers of real GDP growth for 2019-20 are in the 4.5% range.  This marks a continuation of the decline seen quarter after quarter.  Are we headed for Hindu rate of growth in a Hindutva world?

Indian Demographics & Governance EconoView

Having seen India rated below Eurozone countries that were near default, one wonders how well equipped rating models are in handling diversified economies like India having low external interfaces.

Mr. Kapil Sibal's Vision for Education

The Hon. Minister for Human Resources Development floored the audience at the Indo- American Summit on Saturday, with his eloquent vision for education. The highlights of his speech:

1. 21st century stands for Science, Solutions and Sustainability. Education is all about sustainable solutions for mankind. For the first time in human history, resources available with nature are perhaps inadequate for sustenance. Solutions can be found through collaboration.

2. Inclusive education agenda is required for inclusive economic growth. If we do not empower 36% of the population with education - the balance 64% of the population will have to subsidise 400mn population. No economy in the world can sustain that kind of subsidy.

3. 220mn children in India go to school. Only 14mn go to college. So, more than 200mn do not go for higher education. No economy can sustain with such numbers. Today we have about 500 universities and 25,000 colleges. Gross Enrolment Ratio of students is 12.4%. If this is to go to 30% by 2020, India needs another 40mn students in colleges - require another 800-1200 universities and another 35,000 - 40,000 colleges.

4. We need expansion, inclusion and quality. 100,000 students going to the US is a bad economic model. Many more cannot afford to go to the US - they may even be better than the ones who can afford. If we look at output per $ investment, the same investment in India will generate a lot more output. This is not a new economic model - it has already been done in manufacturing and services, where the the US have invested in China and India to enhance their competitiveness. In education, it is better to invest the dollar where the human resource is, rather than have the human resource go to where the investment is. Better to set up colleges in India and send faculty to India, rather than expect that 5-10mn people will travel to the US - because they will never be able to afford going to the US.

5. In the US, there are a total of 75,000 engineers. In India, Bangalore alone has 65,000 engineers. This is the rationale for the economic model. Need to view the business opportunity in a new way. Like the couple who came to Mumbai and decided to offer IB program in municipal schools for children of tea vendors. Children of that school are going to Yale and other parts of the world.

6. I cannot give a $100 computer to children. It is not a sustainable solution for India. What is sustainable in west may not work here. A nano car is sustainable here. Empowerment with sustainable solutions calls for such cost-effectiveness in education.

7. Unions in education institutions under colonial rule were part of the freedom struggle. But today, in education institutions, we need unions for empowerment of the minds. Need to change from being obstructive to being constructive.

8. Universities need the freedom and creativity. Need to challenge the past. If some one had not challenged the laws of gravity, we will never have flown.

9. We also need a society that tolerates dissent; a mind that is sensitive.

My comments:
After the minister left, many of the speakers were back to minutae based on blinkered thinking. One young member of the audience rightly asked one of the speakers - if we are the big segment that you are worried about, why don't you get more of us in the education-related committees?

Dr. Nitin Nohria (Dean, HBS) on India

A galaxy of industry biggies were at the JRD Tata Memorial Oration yesterday. A few interesting points made by Dr. Nohria in his address:
1. The last Century belonged to the US. It was able to do that because American economy / companies kept evolving. GE is the only company that was in the Dow Jones for the whole of the century.
2. Japan had its time in the 80s. But they could not stay there because they did not evolve.
3. In the last decade or so, India's position in the global economy is being recognised. It is tough to get there - it is tougher to stay there. If we become complacent - and think we will get our "rightful" share of the global economy - we will not remain there.
4. Sumantra Ghosal believed that companies need to be good at three things - being cost effective, addressing localised market segments & innovation. (a) In the first decade after liberalisation, Indian companies became cost effective to withstand global competition. Bharti did that through a majorly outsourced telecom model, keeping only key aspects like branding to themselves. (b) In the second decade, companies like Bharti targeted localised market segments - not corporate or urban middle class - but discovered newer markets in rural India. CK Prahalad's fortune at the bottom of pyramid is at work. (c) This decade, companies need to get on to innovation.

My personal comments:
1. Bharti was spoken about - but not Reliance. Remember? This was a JRD Tata Memorial Oration.
2. One hour is too long for reading a prepared speech. Nohria could have engaged with the audience better. But yes, the quality of his thoughts carried the day through. Brilliance was oozing out of the bald pate!

Hong Kong and its Economy

Met Raymond Yip of the Hong Kong Trade Development Council yesterday. He mentioned, how, over 90% of their Gross Domestic Product (GDP) comes out of services - one of the highest proportion in the world.
What followed was interesting - they control a big slice of manufacturing through their shareholding in China and other countries. This aspect of manufacturing does not get captured in GDP, which goes on the basis of geographical territory. Gross National Product (GNP), which goes on the basis of ownership, would capture it. Thus, when Tatas own steel operations abroad, the output would be part of GDP of UK, but become part of GNP of India.
With globalisation, companies have their operations spread all over the world. This trend will only increase. Should we consider giving more importance to Gross National Product (GNP), when we evaluate the role of countries?