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The outbreak of corona virus has put a serious question mark on the continuance of neo liberal economic policy. The policy which emphasises a competitive and profit-making economic order in the world has virtually marginalised the concept of welfare economics. Many countries around the globe are presently following this economic policy. As a result, many sectors which were previously under government control have been handed over to private parties. In support of privatisation, it is argued that efficiency is increased and secondly unnecessary burden is reduced from state’s exchequer.
But the limitation of this much touted policy came to light when the world had to seek respite from COVID-19. It was found that government’s active participation in controlling such a pandemic was necessary. For example, the countries where the healthcare system is in private hands failed miserably in combating the virus. Developed nations, such as United States of America (USA), Italy and Spain have been the worst affected by this virus. As a result, when the infection spread throughout these countries, the governments could not do much more than issue statements. Acquiring health care system after the outbreak has proved to be futile.
Thankfully, the situation in India is different. But think what would have happened if we have privatised our aviation sector, the plan is in the pipeline as the national carrier has a history of incurring huge losses. However, it could not be handed over to a private party as there was no one to invest such a huge amount. The same loss-making airline has played an pivotal role in keeping Indians free from worry by sending its aircrafts to bring back fellow citizens who were stranded in various foreign countries since the outbreak of this pandemic. There is no gainsaying that no private airline would have taken such an initiative as it was certain to reduce its profit margin. Some other countries were not as lucky as its aviation sectors are managed by private sector companies.
This should act as a lesson for those who do not care much about the concept of welfare state, for them, high GDP is the topmost priority. They argue that by virtue of high GDP, the poor too will also be benefited through trickling effect. But those who hold different views argue that welfare measures by the government are necessary as that is the only way to reduce the gap between the rich and the poor. At this hour of crisis, it seems that those who advocate government’s role in welfare are right. For example, at a time when entire nation is under lock down for three weeks, it is the public distribution system (PDS) that has become crucial in making food available to all. In the neo liberal economic policy, there is no place for PDS. So imagine the conditions of the people in a country which is under the grip of corona and does not have a PDS. It is heartening to note that to combat the unprecedented situation, Government of India has announced various measures and economic packages to provide relief to citizens. Clearly, welfare is the need of the hour, not privatisation.