That nagging Bajaj Auto issue PDF Print E-mail
Monday, 13 July 2020 00:22
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At 2% infection levels, Bajaj Auto possibly needed to shut for a bit; but what will we do when all-India infection levels are even higher?


A sero-survey put infection levels in India at 0.7% in May. It is probably more now. Newspapers report it at 15% for Delhi. A long national lockdown is neither feasible nor desirable


Is Bajaj Auto managing director Rajiv Bajaj justified in the 50% salary cut that he plans when his plant is closed after the government ordered a shutdown in Aurangabad between July 10 and 18? And, if workers do not come to work on July 8 and 9, and July 19—for two days before the shutdown and the day immediately after it—he has said there will be a 100% salary cut.


Clearly, Bajaj was reacting to the demand of the unions that the factory be shut down for a few weeks to break the cycle of infection-spread. He can’t avoid the shutdown since that has been ordered by the government—infection levels in Aurangabad have risen more than four-fold in the last 30 days, so the government wants to control the spread —but doesn’t want the unions to force him to extend the lockdown given infection levels in the plant are quite high at 2%, going by even what the management says.

Any answer you give, needless to say, forces you to take a view on Bajaj’s larger statements that lockdowns cause more damage than good. Bajaj had even expounded on how ‘it was only the old and the vulnerable that need to be secured’ and that the young and healthy wouldn’t suffer. Bajaj has also spoken extensively about the wonders of homoeopathy and how that worked during the swine flu epidemic in 2009, but this time around it doesn’t seem to have worked given the rising infections in his plant.

Since it is not possible to create a no-lockdown scenario—the national lockdowns, after all, did take place—it is not possible to empirically test Bajaj’s hypotheses. But some observations can, nonetheless be made. The data on Covid deaths, for instance, shows that half of those who died were under 60, and 43% had no co-morbidities; so it is not necessarily the old and the vulnerable who are at risk. And, if 2% of Bajaj Auto’s staff were infected as compared to 0.06% for India—8 lakh cases on a population of 130 crore—clearly there is reason to do something to check the spread.

Comparing Bajaj to the US president Donald Trump seems a bit of a stretch, but Nobel Prize-winning economist Paul Krugman has an informative article in The New York Times (nyti.ms/3iOa6BS) where he links America’s losing battle with Covid-19 to president Trump wanting to end lockdowns (‘LIBERATE MINNESOTA’, Trump first tweeted in April, and followed it up with ‘LIBERATE MICHIGAN’). While the Democratic governors in both states refused to fall in line, Krugman says Republican governors in Arizona, Florida, Texas and elsewhere lifted many restrictions including ‘stay-at-home orders’; and given Trump’s own refusal to wear one, no orders were given requiring people to wear masks. The anti-lockdown demonstrations, Krugman asserts, ‘weren’t spontaneous, grass-roots affairs. Many were organized and coordinated by conservative political activists, some with close ties to the Trump campaign, and financed in part by right-wing billionaires’.

Bajaj is not financing anti-lockdown demonstrations, nor is he saying there is no need to wear a mask or to maintain ‘social-distance’ between people, but he is certainly among the anti-lockdown folks, those who believe economic growth has been flattened while the disease curve hasn’t. Never mind that, even when there is no national lockdown any more, the economy remains flattened as the fear of the pandemic is keeping people away from markets, from restaurants, from flying, from holidaying, etc.

Apart from the surge in the US cases due to it throwing caution to the winds, Sweden is another important example. Long cited as the non-lockdown utopia the world needed to emulate, it has 40% more deaths than the US (in terms of per million population), 12 times more than Norway, seven times more than Finland and six times more than Denmark (nyti.ms/3fjvYTl); and its economy is contracting at much the same pace as its neighbours who followed more conventional strategies to combat the virus. The US economic growth, as it happens, is also expected to contract despite the lack of lockdowns.

India’s ruling politicians in various states, undoubtedly, have played no small role in making many of Bajaj’s patently over-the-top statements look partially sensible. The purpose of the lockdown, keep in mind, was to slow the pace of transmission of the virus so that the time gained could be used to create enough health infrastructure to deal with the surge in infections and, equally important, to ramp up testing in a big way, so as to be able to get the infected to hospitals or care centres quickly, and to be able to quarantine them effectively so that they didn’t spread the disease.

From the reports of the shortage of beds in top cities like Mumbai and even Delhi for a while—and it can well happen in several other big cities where transmission is taking place rapidly (bit.ly/3edO6wI)—it is clear that not enough health infrastructure was created. It is equally clear India’s testing is woefully inadequate—even though 9.3% of those tested turn out to be positive today, up from 7% a month ago—as it has tested just 7.8 per thousand population versus 113 for the US and 151 for Russia.

But even while we poke fun at Bajaj, we need to answer some questions honestly. The sero-survey done in May put India’s infection level at 0.73% of the population, though the ‘case infection rate’—based on the daily tests done—is much higher. A sero-survey, however, is generally considered more representative of countrywide infections since it is based on scientific sampling techniques. The results are not out for Delhi’s sero-survey, though one newspaper claimed it had got advance results and has said this shows 15% of the population is infected. If the new sero-survey for India that has just been commissioned shows infection levels are up to 2% or even more—and it will certainly be higher in certain cities/states—are we willing to lock India down again?

The economic costs of the lockdown strategy are there for everyone to see, and it was the poor that bore the brunt of it—recall the hundreds of miles some of the poor walked to get away from the virus. Even though Bajaj may be over-the-top, there are no easy answers, either way. Even today, India’s salvation lies in rapidly ramping up testing, in creating more hospitalisation facilities, maintaining social distancing, using masks, sanitizers, etc. A long lockdown is no solution even though small duration localised ones can help.


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