Accept virus as the new normal and start functioning so we don’t damage the economy: NR Narayana Murthy

PTI
Narayana-murthy-pti
If you have to assess India’s own response to COVID-19 so far, what would you say? What would your own assessment be about our response?
Well before I answer that question, let me raise a very important issue that is very pleasantly surprising; deaths due to corona in India is about 0.25% or 0.5% of the deaths due to corona in the developed nations when you compare our population. The fact that the UK has 6 million people, India has 1.37 billion people, they have probably around 40,000 deaths and we have had only 1,000 deaths. Now remember that the normal mortality rate in India is about 0.7%. In other words due to old age, due to all kinds of diseases, we lose about 90 lakh people every year, which means 7.5 lakh every month. In the context, we lost 1,000 people in two months. While it is absolutely sad and there is no doubt, it is something that should speak for what the government has done.

Now the unusual part is that for some reason we have not been able to do research and find out what is the reason for this. Is it because of the weather, is it because of our genes, is it because we all took BCG vaccinations; whatever it is, I have not seen any analysis of this anywhere in India. Now having said that, let me come to the positives and negatives.

First of all, as you have pointed out, the fact that India recognized this danger pretty early and took serious steps to decelerate the spread of the virus itself is a big positive. The fact that our prime minister has taken personal interest and personal charge of this project is another big positive. The fact that all political parties irrespective of their ideologies have fully cooperated and they have not politicized this issue and have worked well with the governments both at the centre and the state government is another positive. The fact that food supply and some cash supply have been made available for a significant part of the daily wage workers both in rural India and in urban India is another big positive.

Now let me come to what could be termed negative. First of all, we have not been able to ramp up our testing ability and the testing facility to the required levels. As you know, even if we are able to test one lakh people a day, we would take 37 years to cover the entire population. By then, our population would have probably increased by some 700 million. So it is a moving target. It is a target which we will probably never achieve; that is one negative.

Second, we have not been able to get any Indian institute of higher learning in science or engineering to come out with a working design of finger pricking testing for the virus at least for antibodies; now this is a huge negative considering that we have so many IITs. The second thing is, no Indian company to the best of my knowledge has produced any finger prick testing for at least antibodies. This is another negative. The third negative is, unlike in developed countries, we have not provided any grants or interim financing to our start-up companies or mid-sized companies and to workers in these companies like several developed nations have done. I would say this is another negative. So overall, we have done many things well. There are few things where we could improve.

Increasingly, there is a view from industrialists, be it Anand Mahindra, Sanjiv Bajaj, Rajiv Bajaj or Sajjan Jindal, that while we have done whatever it takes to flatten the curve and contain the virus, it is equally important to look at restarting the economy and lifting the lockdown. What do you think policy makers can do at this point to revive the economy?
I think by and large they are all right. However, I do not operate at the macro level. Therefore, I do not know what kind of analysis and what kind of data the government has used. We have a wonderful chief economic advisor. He has a great team. So I am sure they would have done some analysis; so who am I to comment on that. Therefore I will only answer what I would have done at Infosys if I had to take such a decision.

So whenever I had a decision to make at Infosys, I depended on the following methodology. I had a set of very bright engineer MBAs in my planning group. I would ask these younger colleagues of mine to first frame fundamental questions about the lockdown, collect data, build a model, do a simulation and then come to the decision. The questions I would have asked in this particular context are what is the loss of revenue for every day of lockdown, how many days of lockdown can the company accept so that the company is not damaged structurally and so that there is minimal inconvenience to the health and wellbeing of the lowest level employees in the company.

I would also like to know the distribution of deaths due to corona by which group is the most vulnerable, I would like to find out. Obviously this data will be at the country level; it cannot be at the company level. Then I would have asked the question, how do we achieve social distancing and reduction of spread of corona among our employees while continuing to work. What is the extra cost of this particular method? For example, we could operate three shifts in a one shift or a two shift company to reduce the number of workers in a shift and to improve social distancing. We can use gowns, masks, gloves and goggles for low-risk employees to attend factories.

As you know younger people like you are much less vulnerable to this than older people like me. So therefore, I would have made an analysis and I would have said look, let the less vulnerable people work with gowns, masks, goggles and gloves and let the senior people either work from home or work in their own offices and then come to a conclusion as to how long we can have the lockdown. I was only talking in the context of Infosys because who am I to advise the government? I am nobody and therefore whatever I said would equally apply to the Government of India and I am sure they would have made their analysis and you have to ask the chief economic advisor Dr Subramanian to answer this question. Have you made this analysis, what are the factors that you considered and what will structurally damage the industry.

If you were in the position of a policymaker today, what kind of trade offs would you have made? Will you continue with the lockdown on May 2 or will you look at a calibrated lifting of the lockdown?
You know me very well. Right from day one, I have always said, let the data lead us to the decision. We should not have opinions, we should go by data. That is why I have always said in God we trust; everybody else brings data to the table. So we have to use mathematics, we have to use statistics, we have to do modelling, we have to do simulation, we have to do scenario analysis and then we can say these are the kinds of damages to our economy, to our health that we can follow and we cannot go beyond this. Therefore within this, what kind of decision should we take? That is a question that you will have to ask the chief economic advisor of the government of India and because he has a good team, he is a very bright fellow. As you know, he has a very good PhD from University of Chicago. So only he can answer those questions. I cannot answer them but I can only tell you the methodology that I would have used and that methodology works equally well for the macroeconomic situations.

Taking a cue from what Anand Mahindra said on his Twitter yesterday, he said that there is a consensus that we should have phased lifting of the lockdown but this might be difficult because every element of the economy is interlinked; so a 45-day lockdown is optimal enough. Let us look at comprehensively lifting the lockdown and allow the industry to function again. As a business leader, would you concur with that?

Anand is a very bright person. Whatever he says has a lot of weight; so I have to agree with him. But before that, remember the first statement I made was there is something strange in the Indian situation. A country with a population of 137 crore, a country where the density of population is very high, particularly if you go to big cities like Delhi, Bombay, Bangalore; compared to the West, it is staggering. The kind of life that most poor people lead is staggering. In such a country, to say that we have had only 1,000 deaths in two months as against say 15,000-20,000 deaths in a country of 65 million population is something very important that we have to understand.

That is where our scientific research institutions; we have so many scientific laboratories, we have so many institutes. It is for them to have done some research and then said look, there is something unique about India. We do not have to worry about it or we have to worry about it. Either way, we should have done that analysis. For some reason, maybe it is my ignorance, I may not have read that but I have not seen it come out in a ubiquitous manner. So only after such an analysis comes can we say this is true or not true.

Now having said that, let me come to another dimension of the problem. This is a unique situation because in this case, the virus passes on to people and lives in the body of youngsters asymptomatically. That is a very dangerous situation. In other words, the youngsters have become victims of the coronavirus, they do not show any symptoms and they mix with older people; that is one thing. The second thing we have is, we are far from tests. As I told you, even if we start to test one lakh people a day, it will take 37 years to test; so that is another big problem we have. The third problem we have is there is no vaccine in sight. Number four, even if there is a vaccine, I do not know whether it will work on the Indian genes; it may work on the Caucasian genes but it may not work on Indian genes; we do not know.

I do not know whether any Indian research institution is doing any research on the vaccine for it or whether it will work in India or will not work. They may be doing it. But the point is, in such a complex situation, the best thing that we can do is to assume that the new normal is to live with coronavirus that we should start doing whatever we were doing before the coronavirus came as if it is part of our lives. In other words, protect the most vulnerable people who are old age people like me. We should be more careful than. People like you can use gowns, goggles, masks and whatever it is; find out how much it costs. Each company can make an effort and then the associations should put forward these things to the government and say look we are doing all of this. Therefore, it would not spread and therefore we will open our factories and you can work three shifts; that is when you will reduce the number of people to one-third if it is a one shift factory. But if it is a two-shift factory, it will be reduced by two-thirds, and therefore, social distancing is possible.

So the name of the game is to simply accept that the new normal for at least the next 12 to 18 months is that we will all learn to live with coronavirus. That is what discussion and debate should be. It cannot become an emotional issue. It cannot become an ideological issue. It has to simply become a data-driven issue, it has to become an issue where a lot of cognizance comes together, discuss and debate and come to meaningful conclusions so that we do not damage the economy and at the same time we do not destroy the health of a significant percentage of our people.

India has left it too late to give a stimulus package. If we do one now, who should be targeted at? Should it be targeted at MSMEs, the lower middle class or middle class because they drive the consumption engine? Who should the stimulus package be targeted?
As you know we have 22.5 crore people employed in agriculture. We have about 11 crore people involved in manufacturing, industrial and government services. We have about 19 crores people who are involved in the unorganised sector; they are daily wage workers and some of them are self employed. So the economists in the government will have to come together. I do not know whether my data is correct or not but they are people who have access to all the correct data. So let them come together and let them add and then say we have 30 crore people who need help and for them, the government could do a direct benefit transfer for the next six months or one year; whatever it is so that those people would not be hampered if they have to continue under lockdown.

On the other hand, if we were to come to the conclusion that we will live with coronavirus but we will take enough precautions so that coronavirus does not defeat us but we will defeat coronavirus, then you have to use gowns, goggles, mask, etc, and we have to find out how much it costs to produce these; whatever it might be, 400 million gowns, masks, goggles, etc, and provide it those poor people so that they can continue their work. They are also worried about their lives. You see, at the end of the day, every human being is worried about his life or her life. So this is another policy that we could take. And then in terms of start-ups, small companies, like it has happened in many developed countries, probably one could guarantee a loan from banks for the next X months for these start-ups as well as MSMEs. There is a certain amount of working capital of three months or six months that could again be done. I think these are all things that should have been done pretty early. It is not too late and I am sure we should be able to do that.