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Millennium Post

In hindsight

While effective, India’s containment plan for COVID-19 could still have benefited from heeding early warning signs and reinforcing accountability systems for shortcomings; elaborates Kandarp V Patel

In hindsight

India is under lockdown. It is a step to flatten the epidemic curve to avoid a large number of COVID-19 cases and resultant fatalities. In times of uncertainty, speculation is dominating many discussions in media while some experts have resorted to scenario-based planning. One of the worst-case scenarios is millions of people in India getting infected with COVID-19, resulting in a large number of deaths. No public health system in any part of the world is prepared for this scenario.

Many experts have explained that India' health systems are not in a position to cope if numbers spike upwards. Fault-lines in our health systems are already showing with stories of shortages in quantity and quality of essential medical equipment, shortage in isolation beds and ICU beds, shortage in the healthcare workforce and so forth. The question is: Is India even prepared for an optimistic or moderate scenario where infection spread is slowed down by 'flattening the curve' through isolation methods?

I want to draw the readers' attention to some early warning signs which were not heeded or not acted upon. Several audit reports have highlighted deficiencies in public health systems time and again for the states and the Centre. These reports have been submitted to concerned public authorities, legislatures and placed in the public domain. But could they achieve their purpose of improving healthcare governance? Could we ask the right questions as citizens and as elected representatives? It seems not.

What are these early warning signs 'we' ignored? I am using 'we' as a general term which includes, first and foremost, executive government personnel and bodies that are responsible for providing healthcare services, regulators who are supposed to monitor them, elected representatives, media and finally general public.

Comptroller and Auditor General of India (CAG), as a public accountability institution of the country, regularly audits different aspects of our public health system and flags deficiencies. For instance, one of CAG's report (Telangana 2017) observed that health authorities have procured drugs having less remaining shelf-life and without the maximum permissible level of active ingredients. Another report of the CAG in 2019 on the public health system of India's most populous state Uttar Pradesh observed: 'Intensive Care Unit (ICU) services were available only in DHs Lucknow and Gorakhpur out of the 11 test-checked DHs/JHs. In the absence of an ICU facility in the remaining DHs/JHs, patients approaching these hospitals in an emergent condition were likely to be referred and/or passed on to higher facility public or private hospitals. The ICUs in DHs Lucknow and Gorakhpur also suffered from a shortage of essential equipment such as ventilators, infusion pumps, ultrasound and arterial blood gas analysis machine.'

Many such examples can be listed. Audit reports in various states have repeatedly reported on inadequate public health facilities as benchmarked against our own Indian Public Health Standards (IPHS) issued by the Central Government. Clearly, our health systems are underprepared even for a moderate level of COVID-19 spread. We could have been better prepared if the concerned authorities took course-correction measures based on CAG's observations to strengthen the public health systems. Weak accountability lead to weak systems that further amplify during crisis times.

Moving away from public health, let's now talk about another interrelated subject from the lens of accountability.

Public financial management relates to the way governments manage public resources both revenue and expenditure. It also relates to the government's responsibility of maintaining a prudent level of public debt and deficit. It involves elements like cash management, public procurement, expenditure management, internal and external audit.

As the impact of COVID-19 on the economy becomes apparent, the Central government and many state governments have announced relief packages. To meet this sudden expenditure requirement, some state governments have started announcing deferment of salary payments to all classes of state government employees. The Centre's package is, for the most part, a rejigging of existing schemes without additional spending allocation. What is limiting the Government's ability to spend additional resources on COVID-19 relief?

Some of the answers to such questions lie in questions already asked by our accountability institutions earlier but not acted upon by those in power. Governments' have already leveraged their balance sheets earlier by breaching FRBM targets, by borrowing off-budget to the extent possible. Refer to this observation in CAG's report 20 of 2018 for the Central Government- " The Government has increasingly resorted to off-budget financing for revenue as well as capital spending. In terms of revenue spending, off-budget financing was used for covering deferring fertiliser arrears/bills through special banking arrangements; food subsidy bills/arrears of FCI through borrowings and for implementation of irrigation scheme (AIBP) through borrowings by NABARD under the Long-Term Irrigation Fund (LTIF). In terms of capital expenditure, off-budget financing of railway projects through borrowings of the IRFC and financing of power projects through the PFC are outside the budgetary control. Such off-budget financing is not part of the calculation of the fiscal indicators despite fiscal implications."

There has been an increasing trend of extra-budgetary borrowings in recent years both in states and at the Centre. Our debt and deficits are almost at unsustainable levels. This limits the various governments' ability to mobilise resources at the time of crisis. Many of the CAG's reports, both in states and the Centre, have already raised these issues earlier. But it did not seem to result in any improvement in managing public finance.

PFM covers aspects of efficiency in public expenditure as well. It has been observed time and again that our public expenditure needs deep rationalisation. Several schemes and programs need rationalisation both at the Centre and in the states. But rationalisation of subsidies and scheme expenditure is generally a low priority for governments. In a recent study on centrally sponsored schemes by ICRIER, it was observed that 158 schemes out of 204 have just Rs 5.7 crore as average outlay per scheme per state. This is highly inadequate to run any meaningful scheme for the states of India. Such schemes if rationalised can help in re-allocation of amounts as high as Rs 27,000 crore to priority areas. This is just an example from the Central government. Similar cases are widespread across state governments as well. Clearly, India has adequate potential to overcome the existing inefficiencies in public expenditure and re-allocate to emerging priority areas.

If the people and institutions responsible were held accountable through the existing mechanism by raising the right questions in the right forum, we would have been in a better fiscal position to support our poor migrants in this time of crisis.

Accountability is not seen as a performance standard but as a threat to be avoided. In the public sector, shareholders are a diffused lot. It can lead to very weak accountability if left to itself. Hence, there are processes and institutions in place to make executive governments accountable to its people during the time between elections.

Some may say that this is not the time to speak of accountability and past deficiencies. I completely agree. At this time, we should focus all our energies on containing the virus spread and ameliorate the economic pain. But are we prepared for the next unknown crisis? A deeper analysis of audit reports could have some answers.

The writer is a civil servant. Views expressed are strictly personal

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