Coronavirus clarifies the role of the Centre and the States
People are asking me how did Trump's ratings reach an astronomical level?
Just like India, most of the execution action is at the State level. In India for example
- States have full control over deciding on Lockdowns
- They can decide on what is essential and what is not.
- They can coordinate and manage the logistics of supply on the essentials on the ground and enforce quarantines
- They can collaborate with Healthcare and Essentials providers to enable an effective response
The Centre has responsibilities too - scientific research , deciding on visas and airline permissions, Airport Quarantine, Managing Railway infections and so on. But a large part of the role of the Central Government is coordinating an effective response and executing it in parts (Cure, Vaccinations, Airports/Railways, Funding, WHO coordination and sharing best practices)
But when it comes to the economy, the Federal Govt/ centre plays a crucial role.
- They decide on Taxes (almost all in India)
- They decide on Excise
- They decide on Tariffs
- They decide on what Investments come and what goes
- The PSUs are under their control
- Large Financial Institutions are in their control
- The RBI works closely with the central Government and determines monetary policy
The States too have a role when it comes to the economy - Implementing policies, making it easy for people to do business, setting up local infra and ensuring quality manpower. However, when it comes to the economy, the President/ PM have a much bigger role to play.
Trump who is a businessman understands this and he has been pushing two important things
- The 2 trillion Economic Package
- A promise of Business as normal after Easter
The fact is that while everyone is worried about their health, that worry comes down once you are locked up in your home. Once locked up, you are worried about your job, money and your business. Donald Trump understands this and he has been laser focussed on it and that is why his ratings have jumped even amongst Democrats.
In India, a package is expected soon. These packages cannot be focussed only on the Poor or only on the biggest businesses. Everyone is hurting it remains to be seen if the Government gets this. In India even more so as the economy has been trending downwards since 2017. The PM's ratings on the economy are pretty ordinary and this is a great opportunity to win a lot of sceptical voters, just like Trump!