Most armies of the world follow a version of the British Defence Doctrine that lays down Ten Principles of War, the first of which is “Selection and Maintenance of Aim”. If the national aim is to achieve quick economic recovery, then we need to remember that the second of the Ten Principles is “Maintenance of Morale”, without which no war, including the one against Covid, can be won.
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By the time the pandemic fades into memory, millions of Indians would have been infected and hundreds of thousands killed. But not a single citizen will remain unaffected. Each of us would have, with some degree of separation, lost a loved one, endured financial and social losses, and for a majority, suffered a decline in quality of life. Graduating students will encounter subdued hiring.
Financing ventures will become harder. Social instability indicators such as domestic violence, road rage and crime have started shooting up. This pent-up stress, anxiety and fear will channelise themselves into low tolerance and increased anger, especially against the haves. While India has handled the battle against Covid-19 well, we face a much bigger challenge in terms of bringing back positivity into the ravaged social psyche.
Morale, positive outlook and a sense of hope fuel economics, which reflects in the Gross Domestic Product. It is impossible for any organisation or nation to achieve its full potential when the mood is despondent. Entrepreneurship and innovation are a state of mind and, without the foundation of high morale, it is impossible to leverage concrete resource outlays. India needs to address the morale and mental state of our citizens on a war-footing for a faster recovery.
This is easy to understand at an individual level. A sad person cannot, just biologically, engage in any productive activity. We are driven by chemicals in the brain that propel us to achieve our goals. The capitalist who seeks to enlarge her empire, the soldier who dies for the glory of the battalion, the athlete who strives against excruciating pain for national pride or the employee who achieves the “ownership mindset” — all need the right chemicals firing in their brain.
A downcast person, far from being productive, even stops caring about his physical well-being. The behaviour of a sad and a depressed person is similar because the same chemicals cause these emotional states. Extrapolating the individual to a family, a company and the nation explains why the state of mind of the nation and its economic recovery are existentially interlinked.
This is a daunting challenge, primarily because mental health has remained largely ignored, though it is the largest national medical burden. The understanding of the subject is so rudimentary that most corporates believe band aids such as yoga, a few counselling sessions or company-sponsored offsites are enough to solve the problem. That’s about as useful as giving an aspirin to an acute heart patient.
This situation, however, presents a unique opportunity for corporate India. Indian corporates have always contributed towards health care in the form of the mandatory Corporate Social Responsibility (CSR) initiative. Apart from hundreds of hospitals run by corporates, many of them have occupied a mindspace in the niches of health. But the mental health space lies open and unoccupied.
There are three categories of stakeholders when it comes to mental health. First, the government — for which it is imperative that the citizen’s morale is uplifted. Second, corporates — whose success depends on the engagement levels of their employees. And finally, the pharma companies, because it is only an optimistic and concerned individual who will care about her own and her family’s health. All pharma companies (not just those who manufacture psychiatric drugs) are, therefore, invested in building a positive mental state among their potential customers.
More Indians, especially the young, will be affected by mental health than any other disease. This is an opportunity for all three stakeholders — for the government to amend CSR rules to channel more resources to mental health; for conglomerates to invest and occupy this mindspace; and for the Indian pharma industry to take a global lead in the domain of preventive interventions.
Most armies of the world follow a version of the British Defence Doctrine that lays down Ten Principles of War, the first of which is “Selection and Maintenance of Aim”. If the national aim is to achieve quick economic recovery, then we need to remember that the second of the Ten Principles is “Maintenance of Morale”, without which no war, including the one against Covid-19, can be won.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.