 Hello and let's talk about Nirmala Sitaraman's economic stimulus package. The Finance Minister announced the fifth and final tranche of the supposedly Rs.20 lakh crore package on Sunday. All the details are finally out and the economists and experts are not happy. Prime Minister Modi promised a package that would be equivalent to 10% of India's GDP. Most calculations put the actual spending by the central government between 1 and 2% of the GDP. The rest is in the form of credits, injection of liquidity by RBI and similar measures. While governments across the world are spending to actually put money in people's hands, our government seems to see this as an opportunity to cut costs and privatize. Meanwhile, the government is going all out on a PR campaign to convince people that it's helping them. Senior journalist Paranjay Guha Thakurtha spoke to Professor R. Ramakumar of the Tata Institute of Social Sciences on this issue. Here is what they had to say. What, according to you, Professor Ramakumar, is the big message that the government is trying to convey through this fifth media conference and by saying that the government is spending the equivalent of 10% of India's GDP that it gets for the poor, that it gets for the migrant worker and it's doing its level best to revive the working of the economy. Let's have your initial comments before I ask you specific questions. Thank you Paranjay. First, two comments are this. It is very clear that the government does not want to open up its purse. It doesn't want to spend as yet. That's point number one. It largely has been using monetary policy and the deposit base of the banks is a substitute for fiscal policy that I think is the one major takeaway from these announcements. The second biggest takeaway from these announcements is that they see this crisis as an opportunity. They see this as an opportunity to bring in a number of reform measures which have over a period of time been extremely contentious, not just vis-a-vis states but also different groups like Labour, for example. These two are my big takeaways from this announcement. Let me just say this. Across the world, if you see, governments have opened up their purses to deal with the crisis. They are not necessarily spending in revival packages of the Kenyan kind that we have seen in the past. What they are largely doing is to try to hold on. What I mean by trying to hold on is that until the pandemic is over, until the spread of infections is contained in some form, let us keep jobs safe, let us keep people healthy and nourished, let us keep people in a better state. Now that is the focus of the 10% of the GDP measures that you have seen across the world. About $7.5 trillion is being announced as fiscal packages across the world. Out of these $7.5 trillion packages, you will see that about $4-4.5 trillion are largely fiscal measures, direct spending by the government. What are these direct spending by the government? They pay the companies, small-scale industries and so on. They pay them with the condition that they will keep the workers in their payroll. They will pay them 50-80% of their wages so that their jobs are not lost. They are given a large number of grants, subsidies, exemptions, etc. in this period in order to allow them to hold on till the crisis blows over. So about only about $3-3.5 trillion out of the $7.5 trillion is monetary policy measures, what is called as below-the-line measures. Now this is the global situation, but we, out of this 20 lakh crore that we have announced as part of this Atman-Nibbar package, I seriously do not see a spending of more than 2 or maximum 3 lakh crore. The rest about 17-18 lakh crore I largely see as being pushed through banks using their deposit base or asking institutions like NABAR to borrow from the market and spend in some kind of funds and so on. That is the nature of this 20 lakh crore package that I see. I do not see more than 2 or 3 lakh crore being spent from the budget of the government. One sentence worth, even this spending of 2 or 3 lakh crore that we are talking about from the budget of the government is not necessarily fresh expenditure. A lot of this 2 to 3 lakh crore is actually expenditure that is already committed in the budget or it will come by cutting some head of account and then saving money from that head of account and spending in this package. So it's not necessarily fresh budget expenditure, it's going to be some kind of re-appropriation that we are going to see. Professor Ramakumar, I was in fact doing a bit of back of the envelope number crunching with my friend A.K. Bhattacharya of Business Standard and in fact our numbers are lower than yours. If we look at schemes which have a direct impact on the FISC, then we actually come to a figure that one is very, very charitable towards the government, a little over 1% of our GDP. That means you have the 40,000 crores on Manrega, you have 8,000 crores which is the viability gap spending for various social infrastructure projects, for the agriculture sector roughly 6,000 crores, for migrant labourers and farmers another 16,000 crores, for the micro small and medium enterprises package, we see barely about 40,000 crores and even if we are very charitable and the Pratamunthi Kalyan, the Yojna which was announced even before these five schemes, out of the 1.7 lakh additional expenditure, even if we take that about 70 or 80,000, the number comes to just a little over 1% of our GDP. And we see that the bulk of the money that is being accounted for and added to the number to arrive at this 20 lakh crores is really as you rightly pointed out, the biggest chunk is what the central bank, the Reserve Bank of India, 8 lakh crores will really be in the form of various form kinds of refinancing. We find public sector organizations like the Power Finance Corporation, the Rural Electrification Corporation where the distribution companies, the electricity distribution companies there, the bailout package of 90,000 crores, the food corporation of India, about 40,000 crores and of course the state governments. In other words, the central government will be spending barely an additional 1% more of GDP but telling India and telling everybody else and telling the country that we are going to be spending 10% of GDP. That's a wrong argument Paranjai, I agree with you. I do not, what I said as 2 to 3 lakh crores, I was being liberal because of how we count what is fiscal can differ across different estimates. But what in my view, direct fiscal, if you count it in that sense, it will not be more than 1.5 lakh crores, that's in my view, out of this 3 lakh crores. What I see as the rest is largely for example, the 45,000 crores expenditure that you mentioned as part of the FCI expenditures is largely a monetization of food grain stock that you already have with you. So it need not be counted at all as part of a fiscal package. So if you remove all that out, I would agree with you that we would be somewhere near 1 to 1.5 lakh crores, exact estimates are yet to be done but when I looked at the different slides that Nirmala Sitaraman presented today, I do not see direct budgetary expenditures exceeding 1.5 lakh crores. But direct and indirect fiscal measures may add up to about 2 to 3 lakh crores somewhere in between depending on how you measure them. That's what I would say. I agree with you that a Himalayan proportion of this 20 lakh crores is largely not money from the government. It's hard earned money of the depositors which will be sort of mobilized to create different funds, a fund for NABAR. NABAR for example has to raise 1 lakh crore for a package. Now that 1 lakh crore will largely come from market borrowings of NABAR. That's not something that will get reflected in the fiscal deficit of the government. That's another way of borrowing through NABAR and not showing it in the fiscal deficit. So a lot of bookkeeping adjustments are happening of this sort and I do not see that the biggest problem with this kind of bookkeeping tricks is that you end up giving very little directly to people. In our next segment, we talk to news clicks Praveer Purkhasta on the global response to COVID-19. Now there has been a lot of politics around the disease. The US attempts to skateboard China being the most prominent. Equally significant is the role of big corporates as they try to generate profit at this time of crisis. Praveer talks about the perspective of the global North on public health and what role this has played in the response. Praveer, thank you so much for joining us. So what we see is that there is definitely a clear divide in terms of responses to COVID-19 between the developed countries and the developing countries and the global North and the global South so to speak. But one of the key interesting aspects is that in the global North, the idea of how to respond to a pandemic itself, there has been a lot of confusion. It's like in some senses, they've almost, it is public health in that sense, it's kind of disappeared from a lot of the perspectives of these countries. So could we start a bit by talking a bit about this? Yeah, you see, if we look at the issue of what I call the problem of infectious diseases in the West, it's really that it disappeared from public view, as you said. And what took over is infectious diseases are really the problems of the poor, people who have not developed countries, dirty, et cetera, et cetera, et cetera. It was essentially a colonial view of the world that infectious diseases are no longer the problem of the West or that and the colonial countries. But it is something which only bothers those who are colonized, the poor countries and who live in all kinds of filth. Now, if I take the racist part of it out, which of course it was, the underlying issue is that in advanced countries, they have actually been able to control infectious diseases, even before we have the quote unquote riddle of the modern medicines in the shape of antibiotics, the sulfur drugs and all of that, which really did, of course, have a huge effect on the infectious diseases. So before that itself, if you see the plague, for instance, which, as you know, probably killed about 20 to 30% population in Europe, those infections were a real cause for concern. And you have this plague picture, which was basically of London and how it really decimated the people over there. Now, I'm not going to talk about how much it affected different sections of the people, because we have now figures of different kinds to show it, of course, affected as it is doing now. Also the poor much more than it did the well off, but it also did affect the rich then too, as it is affecting now, even if it is less than the, you know, what's affecting the poor. So this really spread over Eurasia. This is what's known as the second plague where the first one happened in about 600 odd AD, what's called the Justinian plague. So, but if you leave that out, there is also a third plague, which people seem to have forgotten. And that also took place in Eurasia. If you see, it really took place in countries like India, in countries like Southeast Asia, in, of course, China, and the total was something like 10, about 12 to 15 million people, 10 million died in India alone. Our memories are quite live to this picture of the plague. And when we had the Surat plague, if you remember, in India, there was an instant and immediate reaction, which that is a part of our historical memory. But this did not happen in Europe. In fact, Europe saw only about 1700 plague deaths in the third plague. So therefore, they thought that this is not their problem. And of course, we are not going to talk about the impact of all of this in terms of inequality. It's also interesting, once you have the plagues in Europe, it, in fact, you had a labor shortage economy and the distribution of wealth actually improved, not because of the plague, but because of the consequence of the plague, the short, much less population. Now, people have tried to bring it about the influenza epidemic, also the loss of the wealthy losing part of their wealth, being a less divided, less unequal society. But I think they forget it was really the socialist revolution of 1918, 1917, which coincided with the influenza epidemic. So you see continuous reference to influenza epidemic being the last known epidemic. And what happens is we have a whole set of diseases which get forgotten. As I said here, the third plague was not considered a major one by the West. They considered it that the last pandemic, therefore, not the third plague, which continue up to about 1950, that they considered it only the last pandemic only being the Spanish flu, which of course, as we know now, did not come from Spain, but came from Kansas, probably. But if we look at this, what happens is a whole bunch of infectious diseases become what's called forgotten diseases. Peter Hotez has written a book on this, Forgotten People, Forgotten Diseases. And the question is, if you take the population today, about 65 percent of the global population, if you also include in this forgotten diseases, TV, malaria and dengue, if we include that 65 percent of the global population really suffers from the so-called forgotten diseases or what I would call is the diseases which are forgotten by the pharma companies and the advanced countries, the quote unquote advanced countries of the West. So here is the issue. These are forgotten diseases, but not by the people who are suffering from them, but really by those who do not see the effects of it on them. And that's where we come to the chart that I quite often show that here you have what the Forbes magazine, Forbes publication quotes as the best prepared countries. Of course, it's not their preparation. It's really a global health security index prepared by John Hopkins and Johns Hopkins and I think nuclear, some nuclear body, which looks at all of these kind of issues, nuclear threat index. I think that's what came from and now they can also join with John Hopkins for a global health security index. Then you will see these figures are a couple of days old. You will see that those countries which are supposed to be the ones which are best prepared have fallen really victim to COVID-19 is a big way. I'm not going to make this a theoretical point that that is why because they did not look at infectious diseases, therefore they have suffered the most. The reality is, of course, they're also the most well connected countries and therefore start surprising that it has spread to them so fast. The real issue is that how unprepared they have been for the re-emergence of an infectious disease and the fact that people in the United States, for instance, the first thing they did with the lockdown was imminent for stock up on guns and ammunition. So that is their collective memory that they don't remember the infectious diseases and they don't know as a society how to respond to it. And of course, the fact that CDC has been gutted under Trump, the fact that we have a person heading CDC who essentially represents the American right, all of that meant that CDC, which probably has a much bigger budget than the WHO, was completely unprepared for the epidemic, could not even prepare a test kit, which a number of countries did, even after a month, after they had put out the kit and it had failed, they still could not develop from producing a kit which was working. So from the time they launched the kit, which was somewhere in February, they took one more month because the testing could start in the United States. And as you know now, that one month is what made all the difference. So I think this is the first issue that we really need to look at, that essentially what we have is the fact that there is no collective memory. The public health system have been gutted in the West. They have been handed over to private capital. There is what is called just in time manufacturing principles applied to the health system, by which you don't keep the beds empty. You plan for the influenza peak that comes in the flu seasons, and once that peak is met, during the peak, you should just pick cut to cut. That means you should really not have any surplus capacity. Then of course, the fact that private health care has taken over in a big way. So what they're discovering is private health care as well as the pharma companies basically want ill health because that's what gives them money. Public health is completely opposite to that. And that's something that seems to have forgotten. That's all we have in this episode of Let's Talk. We'll be back tomorrow with the latest news developments of the day. Until then, keep watching News Click.