The aftershocks of the coronavirus pandemic will continue to be felt for times to come. All spheres of human activity, economic and non-economic, have been curtailed, for how long, we do not know. Social distancing would be the norm in the immediate future also, which can change the way humans interact with one another. Academics, sports and entertainment would never be the same because large gatherings will continue to be discouraged.

People will themselves curb their urge to travel. Doubtless, new models of social and business interaction will emerge but the current year may prove traumatic for everyone ~ an Annus horribilis for the entire human civilisation. Fortunately, India is better placed than the Western world to face the aftermath of the coronavirus scourge.

First, looking to the way the coronavirus infection has spread through various countries, deaths due to the dreaded affliction are likely to be far fewer in India, probably because we have a youthful population and an inborn immunity, nurtured by our poor public health and sanitation system. Second, almost half of our population is engaged in agriculture which will never face recession. But, on the flip side, there is the danger of the agricultural sector entering a crisis phase, if postlockdown, we do not address agricultural distress adequately.

The lockdown came at an inopportune time for farmers, who were about to harvest the rabi crop. Migrant labour fled instantaneously, leaving behind the unharvested crop. Those farmers who had somehow harvested their crop through mechanical means are unable to sell it because most of the mandis are closed. Rejuvenation of the manufacturing sector is even more problematic. Currently, almost all factories are closed and labour is on a sabbatical.

Getting labour back to factories is a small part of the problem; restoring the disturbed supply chains would be both difficult and timeconsuming. Additionally, the lockdown kicked in at the end of the financial year when large volumes of commercial goods were in transit. A considerable amount of such goods is now stranded on highways, at railheads and in ports, posing serious problems for both sellers and buyers.

Exporters are facing additional complications with buyers in Covid-hit countries refusing to take delivery of ordered goods or insisting on unconscionable discounts on already received goods. The service sector faces an uncertain future. Because of internet connectivity, many services can be delivered online but with the other sectors almost closed down, there is little demand for services.

With shortages of various kinds looming on the horizon and the countless poor facing existential issues, the Government would like to see economic activity resume quickly, once the lockdown is lifted. The ways in which the lockdown can end are being discussed by the Government but, on the other hand, there is some talk of extending the lockdown.

To avoid the kind of confusion and misery we witnessed when a three-week lockdown was announced at three hours’ notice, it is imperative that the Government should disclose the exact date and modalities of lifting the lockdown, well in advance, because the public and even the Government machinery itself would need some time to strategize for life after the lockdown. Indians are an intelligent and resilient lot. A lot of initiative would be displayed once the lockdown is lifted.

On its part, the Government would need to support agricultural and business activities through clear-cut and well thought out policies. Most importantly, the Government should not grant relief in a piecemeal manner, as was done after Budget 2019, when the Finance Minister would hold press conferences every week in August and September and announce sector-specific relief measures. The Union Budget may need to be redrafted because revenue receipts are likely to fall short of projections and expenditure like that on the Rs.1.70 lakh crore stimulus was not budgeted.

Budget Estimates for financial year 2019-20 put Income- tax collection at Rs.13.35 lakh crore, which was subsequently reduced to Rs.11.70 crore in the Revised Estimates. Official Income-tax collection figures are yet to surface but it appears that Income-tax collection for financial year 2019-20 was in the neighbourhood of Rs 10.70 lakh crore. Viewed in this perspective, the Budget Estimate for the financial year 2020-21, estimating Income-tax collection at Rs 13.19 lakh crore, an increase of 22.33 per cent, appears to be highly optimistic. Similar is the case of GST collections; the Budget Estimate of Rs 11.26 lakh crore had to be reduced to Rs 9.93 lakh crore in the Revised Estimates.

Actual collection has been even lower. As such, the Budget Estimate for GST for the financial year 2020- 21 of Rs 11.04 lakh crore would be hard to achieve. The divestment target for financial year 2019-20 has also been missed. In view of the falling receipts and ballooning Government expenditure, the Finance Minister needs to be more realistic in the goals and assumptions for the current financial year. We would have to tone down overambitious targets like becoming a $5 trillion economy in the next four years or doubling farmers’ incomes in the next two years.

To avoid an unmanageable Budget deficit, the Government may be well advised to reduce the projected expenditure in Budget 2020, by prioritising the necessary over the not so necessary. For example, Budget 2020 has an outlay of Rs 11.72 lakh crore on Central Schemes, comparable to Budget 2019 that supported 122 Schemes, at a cost of Rs 12.03 lakh crore to the exchequer. Before mechanically allocating funds, year after year, the Finance Ministry should carry out a comprehensive outcome audit of all Central Schemes; unproductive Schemes should be mercilessly axed and the money saved on such schemes should be spent on more worthy causes.

The coronavirus crisis has ruthlessly exposed the inadequacies of our healthcare setup. We are woefully short of everything required to face the current pandemic. Personal protective kits, test kits, ventilators, are in short supply. We are importing such equipment from China, which is known to have supplied substandard equipment to other countries. The state of our healthcare system should not surprise us; Budget 2019 allocated a sum of Rs 93,035 crore for healthcare out of which only Rs 71,584 crore could be spent, which is less than ½ per cent of our GDP, far below the optimum level of 6 per cent of GDP.

Even the flagship Ayushman Bharat Scheme suffered from neglect; as against a budgeted amount of Rs 6,400 crore only Rs 3,200 crores were spent, which comes to a mere Rs 64 per beneficiary. The Government has made a welcome commitment to raise public healthcare spending to 2.5 per cent of the GDP by 2025, but much more expeditious action is required. The agricultural sector has been in deep distress for a while and if adequate support is not forthcoming, the present crisis may well prove to be the coup de grace for agriculture. Serious implementation issues bedevil the agricultural sector, against a budget allocation of Rs 1,30,485 crore in the previous year, only Rs 1,01,904 crore could be spent.

The Government should earmark additional funds to augment rural infrastructure, in addition to the Rs 1,34,400 allocated in Budget 2020. In the long run, implementing a well thought out comprehensive strategy like the Swaminathan Report on Agriculture of 2006 or putting in place a policy like the Common Agricultural Policy of the European Union alone can end agricultural distress. The coronavirus pandemic induced economic crisis calls for a sober rethink on public finances. Viewed positively, it is an opportunity to fix the anomalies that have crept in our economy. As President John F Kennedy said in his State of the Union Address in January 1962: “The time to repair the roof is when the sun is shining.”

(The writer is a retired Principal Chief Commissioner of Income-Tax)