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The Covid-19 pandemic has come with whole new set of challenges to Governments across the world in terms of policy-making. India is no exception. Raising enough resources for public welfare while ensuring sustainability is proving to be one of the biggest challenges.

In this back-drop of financial crunch seen across the world, do you know that Indian states were able to borrow significantly more in 2020-21? It would perhaps pleasantly surprise you that states were able to raise an extra Rs 1.06 lakh crores in 2020-21. This significant increase in availability of resources was made possible by an approach of Centre-State bhagidari. 

When we formulated our economic response to the Covid-19 pandemic, we wanted to ensure that our solutions do not follow a ‘one size fits all’ model. For a federal country of continental dimensions, finding policy instruments at the national level to promote reforms by State Governments is indeed challenging. But, we had faith in the robustness of our federal polity and we moved ahead in the spirit of Centre-State bhagidari. 

In May 2020, as part of the Aatmanirbhar Bharat package, the Government of India announced that State Governments would be allowed enhanced borrowing for 2020-21. An extra 2% of GSDP was allowed, of which 1% was made conditional on the implementation of certain economic reforms. This nudge for reform is rare in Indian public finance. This was a nudge, incentivising the states to adopt progressive policies to avail additional funds. The results of this exercise are not only encouraging but also run contrary to the notion that there are limited takers for sound economic policies.

The four reforms to which additional borrowings were linked (with 0.25% of GDP tied to each one) had two characteristics. Firstly, each of the reforms was linked to improving the Ease of Living to the public and particularly the poor, the vulnerable, and the middle class. Secondly, they also promoted fiscal sustainability.

The first reform under the ‘One Nation One Ration Card’ policy required State Governments to ensure that all ration cards in the State under the National Food Security Act (NFSA) were seeded with the Aadhaar number of all family members and that all Fair Price Shops had Electronic Point of Sale devices. The main benefit from this is that migrant workers can draw their food ration from anywhere in the country. Apart from these benefits to citizens, there is the financial benefit from the elimination of bogus cards & duplicate members. 17 states completed this reform and were granted additional borrowings amounting to Rs. 37,600 crores. 

The second reform, aimed at improving ease of doing business, required states to ensure that renewal of business-related licences under 7 Acts is made automatic, online and non-discretionary on mere payment of fees. Another requirement was implementation of a computerized random inspection system and prior notice of inspection to reduce harassment and corruption under a further 12 Acts. This reform (covering 19 laws) is of particular help to micro and small enterprises, who suffer the most from the burden of the ‘inspector raj'. It also promotes an improved investment climate, greater investment and faster growth. 20 states completed this reform and were allowed additional borrowing of Rs. 39,521 crores. 

The 15th Finance Commission and several academics have emphasised the crucial importance of sound property taxation. The third reform required states to notify floor rates of property tax and of water & sewerage charges, in consonance with stamp duty guideline values for property transactions and current costs respectively, in urban areas. This would enable better quality of services to the urban poor and middle class, support better infrastructure and stimulate growth. Property tax is also progressive in its incidence and thus the poor in urban areas would benefit the most. This reform also benefits municipal staff who often face delay in payment of wages. 11 states completed these reforms and were granted additional borrowing of Rs. 15,957 crores. 

The fourth reform was introduction of Direct Benefit Transfer (DBT) in lieu of free electricity supply to farmers. The requirement was for formulation of a state-wide scheme with actual implementation in one district on a pilot basis by year end. Additional borrowing of 0.15% of GSDP was linked to this. A component was also provided for reduction in technical & commercial losses and another for reducing the gap between revenues and costs (0.05% of GSDP for each). This improves the finances of distribution companies, promotes conservation of water and energy and improves service quality through better financial and technical performance. 13 states implemented at least one component, while 6 states implemented the DBT component. As a result, Rs. 13,201 crore of additional borrowings was permitted. 

Overall, 23 states availed of additional borrowings of Rs. 1.06 lakh crores out of a potential of Rs. 2.14 lakh crores. As a result, the aggregate borrowing permission granted to states for 2020-21 (conditional and unconditional) was 4.5% of the initially estimated GSDP. 

For a large nation with complex challenges as ours, this was a unique experience. We have often seen that for various reasons, schemes and reforms remain un-operational often for years. This was a pleasant departure from the past where the Centre & States came together to roll out public friendly reforms in a short span of time amidst the pandemic. This was made possible due to our approach of Sabka Saath, Sabka Vikas and Sabka Vishwas. Officials who have been working on these reforms suggest that without this incentive of additional funds, enactment of these policies would have taken years. India has seen a model of ‘reforms by stealth and compulsion’. This is a new model of ‘reforms by conviction and incentives’. I am thankful to all the states who took the lead in ushering in these policies amidst tough times for the betterment of their citizens. We shall continue working together for the rapid progress of 130 crore Indians.

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India’s 100 crore-and-counting Covid vaccine doses show what people’s participation can achieve
October 22, 2021
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India completed vaccination of 100 crore doses on October 21 in about nine months since starting vaccination. The journey from anxiety in early 2020 to assurance has happened, and India has emerged stronger, thanks to the world's largest vaccination drive.

It has been a truly Herculean, bhagirath effort involving multiple sections of society. For any effort to attain and sustain speed and scale, trust of all stakeholders is crucial. One reason for a successful campaign was the trust that people developed in the vaccine and the process followed, despite various efforts to create mistrust and panic. There are some who only trust foreign brands. However, when it came to something as crucial as the Covid-19 vaccine, Indians unanimously trusted

'Made in India' vaccines. This is a significant paradigm shift.

All for One, and One for All

India's vaccine drive is an example of what India can achieve if the citizens and the government come together with a common goal in the spirit of people's participation, or jan bhagidari. Initially, many doubted the capabilities of 130 crore Indians. Some said India would take 3-4 years, while others doubted people coming forward to get vaccinated. There were those who said there will be gross mismanagement and chaos, while others doubted India's ability to manage supply chains.But just like the 2020 national lockdown - janta curfew - and subsequent lockdowns, the people showed how spectacular the results can be if made trusted partners.

When everyone takes ownership, nothing is impossible. There was a lot of pressure from different interest groups to give preferential treatment to them in vaccination. But GoI ensured that there is no VIP culture in the vaccination drive.

In early 2020, it was clear to us that this pandemic will have to be eventually fought with the help of vaccines. We started preparing early. We constituted expert groups and started preparing a roadmap right from April 2020. Till today, only a handful of countries have developed their own vaccines. More than 180 countries are dependent on an extremely limited pool of producers, and dozens of nations are still waiting for the supply of vaccines.

Imagine if India did not have its own vaccine. How would India have secured enough vaccines for such a large population? How many years would that have taken? It is here that credit should be given to Indian scientists and entrepreneurs for rising to the occasion. It is due to their talent and hard work that India is truly aatmanirbhar when it comes to vaccines. Our vaccine manufacturers, by scaling up to meet the demands of such a large population, have shown that they are second to none.

GoI has been an accelerator and enabler of progress. It partnered with vaccine-makers right from day one, and gave them support in the form of institutional assistance, scientific research, funding, as well as accelerated regulatory processes. All ministries came together to facilitate and remove any bottlenecks as a result of the 'whole of government' approach.

In a country of the scale of India, it is not enough to just produce. Focus has to be on last-mile delivery and seamless logistics. To understand the challenges involved, imagine the journey taken by one vial of vaccines. From a plant in Pune or Hyderabad, the vial is sent to a hub in any of the states, from where it is transported to the district hub. From there, it reaches a vaccination centre. This entails the deployment of thousands of trips taken by flights and trains. During this entire journey, the temperature has to be maintained in a particular range that is centrally monitored.

We are the Nation

For this, over 1 lakh cold-chain equipments were utilised. States were given advance notice of the delivery schedule of the vaccines so that they could plan their drives better and vaccines reached them on the pre-decided days. This has been an unprecedented effort in the history of independent India.

All these efforts were complemented by a robust tech platform in CoWIN. It ensured that the vaccine drive was equitable, scalable, trackable and transparent. This ensured that there was no scope for favouritism or jumping the queue. It also ensured that a poor worker could take first dose in his village and the second dose of the same vaccine in the city where he works, after the required time interval. In addition to a real-time dashboard to boost transparency, the QR (quick response)-coded certificates ensured verifiability. There are hardly any examples of such efforts not only in India but also the world.

In my 2015 Independence Day address, I had said that our country is moving ahead because of 'Team India', and this 'Team India' is a big team of our 130 crore people. People's participation is the biggest strength of democracy. If we run the country through the participation of 130 crore Indians, our country will be moving ahead 130 crore steps every moment. Our vaccination drive has yet again showed the power of this 'Team India'. India's success in its vaccination drive has also demonstrated to the whole world that 'democracy can deliver'.

The success achieved in the world's largest vaccination drive should further spur our youth, our innovators and all levels of government to set new benchmarks of public service delivery that will be a model not only for our country, but also for the world.