Kerala and Covid 19 linkfest

Here is a consolidation of several links on Kerala's efforts at combatting Covid 19.

1. The Economist has a very good summary,

But Kerala tamed Nipah within a month, adopting an all-hands approach that included district-wide curfews, relentless contact-tracing and the quarantine of thousands of potential carriers. Kerala has used the same simple, cheap tools to fight covid-19, with similarly stellar results... Vietnam and Kerala both benefit from a long legacy of investment in public health and particularly in primary care, with strong, centralised management, an institutional reach from city wards to remote villages and an abundance of skilled personnel... Kerala’s state government has been similarly energetic, from the chief minister, its top elected official, giving nightly pep talks to village-level committees working to set up public hand-washing stations. Aside from showing logistical efficiency in monitoring cases and equipping its health system, it has also emphasised sympathy and compassion for people affected by the pandemic. The state has mobilised some 16,000 teams to man call centres and to look after as many as 100,000 quarantined people, ensuring they do not lack food, medical care or simply someone to talk to. Free meals have been delivered to thousands of homes, as well as to migrant workers stranded by a national lockdown.

And this from the Washington Post,

Even though Kerala was the first state to report a coronavirus case in late January, the number of new cases in the first week of April dropped 30 percent from the previous week... The success in Kerala could prove instructive for the Indian government, which has largely shut down the country to stop the spread of the contagion... The state faced a potentially disastrous challenge: a disproportionately high number of foreign arrivals... Its challenges are plenty — from high population density to poor health care facilities — but experts say Kerala’s proactive measures like early detection and broad social support measures could serve as a model for the rest of the country... Kerala’s approach was effective because it was “both strict and humane,” said Shahid Jameel, a virologist and infectious disease expert... Henk Bekedam, the World Health Organization’s representative in India, attributed Kerala’s “prompt response” to its past “experience and investment” in emergency preparedness and pointed to measures such as district monitoring, risk communication and community engagement. 

This is a very good narrative of the Covid management in Kerala - plain simple and detailed monitoring. This, this, this, and this are good summaries of the Kerala government's response. More on the Kerala's Covid 19 response here and here. This is a very good and comprehensive post.

At the core of the Kerala model is its simplicity and doing the basic stuff, and getting execution right. And this, as we know from elsewhere in India and abroad, is very hard and rare.

2. History. But Kerala's success  has been built on a very strong foundation of investments in primary health and education since the 19th century made by the combined efforts of its maharajahs, social reformers, missionaries. In an excellent article, V Ramankutty writes,

Both Travancore and Kochi had strong public health traditions. Travancore popularised vaccination in the 19th Century by royal edict. The Maharaja of Travancore is known to have publicly accepted vaccination for his family members and advised his people to follow his example so that their fears may be allayed. They also had strong departments of modern medicine, with general hospitals in Trivandrum and Ernakulam, and Women and Children’s Hospital in Trivandrum. Travancore appointed Dr Mary Punnen Lukose as the Durbar Physician — one of the highest posts under princely rule. A woman raised to such a position of eminence was a first for India. Dr Lukose, a Syrian Christian, had studied medicine in England, when few women had the opportunity to do so even in western countries.

This about how Kerala was able to avoid the trap of falling into the prevailing late-nineties ideological dominance of private sector,

Around this time, the World Bank and other lending institutions increasingly provided loans for health system development, and Kerala was one of the Indian states to make use of them. At the same time, the World Bank, in line with its philosophy of encouraging private initiative, tried to restructure the government health system, significantly pressing for the introduction of user fees. In Kerala, this was resisted by a strong coalition of civil society. One important piece of legislation at the time was instrumental in changing the face of healthcare again: the decentralisation of power to the panchayats and other local bodies. This brought health institutions under the direct administration of local bodies, and also provided them more funds. Many local bodies utilised this opportunity to improve the facilities in hospitals. This was the beginning of revival of the public sector in health in Kerala. Recent years have seen many initiatives in the government health sector, and 10-20 per cent of people have moved back to the public sector. More sophisticated care is available at taluka and district hospitals as well as government medical colleges. Successive governments have provided improved funding at different tiers of government institutions.

3. Strong public health system. This is a very good article on the important role played by the 26000 community health workers or ASHAs.

4. Governance. Several elements of plain simple good bureaucratic actions and political leaderships have contributed to the state's success so far.

This is the Kerala government's supply chain and inventory management system which lists over 19000 GST registered traders. This is the Government's monitoring Dashboard, which has granular information on Covid status. This is the state government's services portal, Jagratha. 

This and this are good descriptions of Kerala's focused contact tracing and isolation work.

4. The state's response has been characterised by getting several small things right and a space for decentralised district-level initiatives.

Sample this on the use of low cost technology innovations like automated telephone calls to those under isolation.

4. Another feature of the Kerala government's work has been its transparency, constant communication, and painstaking field work and political leadership. Sample this,

... state's decentralised community-level task force, devised to lend a helping hand for those who are quarantined. Kerala has structured a three-member team in each village, comprising a village's elected representative, a public health worker and a police officer, for monitoring and assisting any need for those in home quarantine.

This interview of the Kerala Chief Minister is as statesmanly an interview as any. It also clearly indicates the reasons for Kerala's success - being transparent with details, and doing the simple things right. This is another interview of the Kerala CM which pretty much captures the essence of what the state is doing right.

5. It also was the earliest, by weeks, of any government in India to step in with economic support measures. This is a good description of its economic rescue package.

6. Another notable feature was the humane nature of the response by the state, both the government and especially civil society organisations. This describes the state's community kitchens and home delivery which have now been established across all villages and towns. This article highlights how the state has mobilised Kudumbashree women's self help groups to run community kitchens to prepare food for the poor.

7. Kerala's bigger long-term challenge would be to accommodate its returning Gulf emigrants. They brought in Rs 1 trillion, or one-third of the state's total income.

Weekend reading links

1. China is using the Covid 19 pandemic to push through a legislation that would allow it to establish national security institutions. The legislation, which would by-pass Hong Kong's Legislative Council and be an annex to the Basic Law, the city state's constitution. It would allow the government to target people indulging in "splitting the country, subverting state power" etc.

A similar attempt in 2003 to insert a new national security law, Article 23, was shelved after massive pro-democracy protests.

2. Pakistan has awarded the first phase of the construction of the Diamer Bhasha dam project in Gilgit-Baltistan in occupied Kashmir to a joint venture between Power Construction Corporation of China and Pakistan Army's Frontier Works Organisation. The total project, estimated to now cost between $8.77-14 bn, will be funded from Chinese loans drawn from the China-Pakistan Economic Corridor (CPEC). The project is estimated to finally generate 4.5 GW of power and store 8.1 million acre feet of water.

3. The NAR reports of threats from China to retaliate against US actions on Huawei,

"Based on what I know, if the U.S. further blocks key technology supply to Huawei, China will activate the 'unreliable entity list', restrict or investigate U.S. companies such as Qualcomm, Cisco and Apple, and suspend the purchase of Boeing airplanes," said Hu Xijin, editor-in-chief at the Chinese Communist Party-affiliated Global Times, which published such a report Friday... After U.S. intentions to double down on its Huawei ban had become known in March, Huawei's rotating chairman Eric Xu said he does not think "the Chinese government would sit and watch Huawei be slaughtered" and warned of rippling ramifications if Washington went ahead with such a move.

This would effectively trigger the start of a tit-for-tat round of actions, whose end-game can be very unpredictable.

For a start, such retaliation will almost certainly force President Trump, facing an election, into even greater belligerence. And in the short and even medium-run the costs to China can be prohibitive. Besides, it would further entrench the new Cold War mentality in the US as a bipartisan consensus.

4. The China diversification game is easier said than done. Even as President Trump is urging US companies to diversify away from China, Apple appears to be yoking itself even deeper into China. In what is being seen as an attempt to diversify its supply-chain dependence on Taiwan's Foxconn, Apple has been propping up a fast growing Chinese competitor, Luxshare ICT.

Apple has advised one of its Chinese AirPods assemblers to make a major investment in an iPhone and MacBook metal casing provider, a move the California tech titan hopes will create a formidable alternative to another of its longtime suppliers, Taiwan's Foxconn. Luxshare-ICT, a fast-rising Chinese tech company known for its aggressive growth strategy, has been in talks with Catcher Technology, the world's second-largest metal casing provider, for more than a year and has recently entered a deeper round of negotiations... The deal, if realized, would give Luxshare the ability to produce high-quality metal casing as well as access to smartphone assembly know-how, which would take it a step closer to becoming the Chinese version of Foxconn -- a single company with operations that span nearly the entire electronics supply chain. Such a move could ultimately help Luxshare grab a share of iPhone production, which ships around 200 million units each year. Foxconn, the world's largest contract electronics manufacturer, has long been Apple's biggest supplier, accounting for more than 50% of iPhone production since the device's debut in 2007. 

5. Graphic details of Chinese encroachments into Indian territory gradually over the years by Phunchok Stobdan. This article by Sekhar Gupta has a nice description of the Chinese strategy on the border. 

Everything, from 1962 to Doklam, fits a pattern: Deliver a message, add leverage, and return. All the stand-offs after that, including recent ones such as Chumar, Depsang Plains, and Doklam, have ended the same way. The message is, see, who’s the boss out here.

6. Saudi Arabia's $325 bn SWF, Public Investment Fund (PIF) is on a bargain hunting spree to invest in the assets distressed by the pandemic.

This is even as the country is facing a fiscal crunch from low oil prices, which has forced deep cuts in government spending, new debts, painful austerity measures and a tripling of VAT to 15%.

7. How quickly food tastes change, from the US yogurt market,

Greek yogurt occupied 1 percent of the yogurt market in 2007; that jumped to 44 percent by 2013.

8. The Economist has a profile of Princeton economist Leonard Wantchekon,

In 2014 Mr Wantchekon founded the African School of Economics in Abomey-Calavi, Benin. Its aim is to offer African students the highest standards of mathematics and economics teaching, ensuring they can compete with graduates overseas. It is refreshingly drab, with no splurging on a flashy campus or needless technology. The 100 or so students pay $2,400 per year, about the same as at a public university. “This is not about doing something grandiose,” says Mr Wantchekon. It is a model that can be replicated. Another campus was opened this year in Ivory Coast. The school draws on several influences. The name nods to the London School of Economics. Princeton is one of more than a dozen “academic partners”.

This is a mighty impressive achievement. The School has campuses in Benin and Cote d'Ivoire.

This is a good example of what reputed academic researchers based in US universities can do for their native countries - promoting academic pursuits there, instead of just using them as platforms to promote their professional careers. 

9. Has Covid 19 ushered in the return of the permit raj in India? The number of notifications and guidelines issued by the central and state governments in India is 4890 and counting. Naushad Forbes has a good listing of the new regime faced by his company here.

10. Good chronicle of a migrant student's misery in a journey from Ahmedabad to Warangal on the Shramik Special train. Sensitivity is not a trait that Indian state shows even in best of times. For sure, there are reasons. But the reality cannot be denied.

11. The Economist has a fascinating article on overseas Chinese diaspora billionaires. 

According to The Economist’s analysis of data from Forbes magazine, last year more than three-quarters of $369bn in South-East Asian billionaire wealth was controlled by huaren (a Mandarin term for “overseas Chinese” who are citizens of other countries). A lot resides in Singapore, a rich majority-huaren city-state. But plenty is spread from Indochina and Indonesia to the Philippines. Malaysia’s Robert Kuok oversees an empire that spans everything from sugar to Shangri-La hotels. In Indonesia Lippo Group, owned by the Riady family, is active in banking, property and health care. On last year’s list 15 of 17 Filipino billionaires were ethnic Chinese; SM Group, run by the Sy clan, has high-end malls across China. Myanmar is too poor for billion-dollar fortunes, but many of its leading businessmen are Chinese-Burmese, like Serge Pun of Yoma, a property-to-banking concern, or Aik Htun of Shwe Taung Group, with interests in infrastructure and real estate...

Although Chinese settlers first arrived in South-East Asia in the 15th century, many founders of today’s top huaren business dynasties fled south to escape poverty and violence in the early 1900s. Most assimilated culturally and, like Chia, took local names. They prospered first as traders, then in some cases by cosying up to power. Liem Sioe Liong of Salim Group, a noodles-to-finance conglomerate, enjoyed famously close ties with Suharto, Indonesia’s dictator from 1967 to 1998, picking up lucrative monopolies and licences in areas from flour-milling to clove imports. Around the region such links helped the tycoons build vast, vertically integrated groups as Asia boomed in the 1990s. Together these constituted what has sometimes been described as a “bamboo network” of firms with Chinese roots, united by Confucian values of diligence and thrift. Trading and feuding with one another in turn, their bosses ended up dominating industries from farming to finance.

And as with everything that has a Chinese connection, there is plenty to be concerned about,

The Overseas Chinese Affairs Office was recently folded into the Communist Party’s shadowy United Front propaganda division. Many suspect that Mr Xi Jinping wants to muddy the distinction between huaren and huaqiao (Chinese nationals living abroad). Some huaren business leaders are handed roles on Chinese state bodies, such as the Chinese People’s Political Consultative Conference, a talking shop. Politicians in South-East Asia worry in private about “influence operations” from Beijing.

12. Jean Dreze argues in favour of a dramatic expansion of the NREGS and making it a true demand-driven program,

This situation calls for large-scale opening of NREGA works on a proactive basis. Every village needs at least one major worksite, where a good number of people can work at short notice (with adequate distancing precautions). Ideally, workers should be allowed to enrol at the worksite... Much can be done to facilitate this: expanding the list of permissible works, hiring more gram rozgar sevaks (employment assistants), simplifying the implementation process, mobilising para-teachers for work application drives, and so on. And of course, top-down orders to expand the scale of works could work wonders... It is also worth considering a return to cash payment of NREGA wages, at least as an option for the duration of the crisis. This would not only help to ensure timely and reliable payment of wages, but also spare workers the ordeal of extracting their wages from overcrowded banks or business correspondents. Further, cash payment of wages would act as a tremendous incentive for rural workers to demand NREGA work, whatever it takes. 

13. Business Standard has an article examining the case for private prisons. This is an area where the tide has already turned in countries ranging from US, UK, Australia etc, as stories of problems with prison privatisation mount. An editorial in the Financial Times, no less, threw in the towel on privatised prisons last year. Another example of how trends which have played itself out and become discredited in developed economies continue to enjoy credibility among commentators in India (developing countries).

14. Finally, there is growing evidence of Indian lenders becoming over-cautious due to the mounting Covid 19 distress and turning away borrowers. 

Cycles of history by John Bagot Glubb

Ananth points attention to this essay from 1976 by Sir John Bagot Glubb, the former Commander of the Arab Legion.

Glubb Pasha, as he is popularly called, talks about viewing history in terms of history of the human race and situating episodes or periods within that broader history. From this perspective, he points to a striking feature of large European and Arab empires. They all lasted around 250 years, or 10 generations of 25 years each.

Any regime which attains great wealth and power seems with remarkable regularity to decay and fall apart in some ten generations.

While there are obvious simplifications, the sheer extent of striking similarities of things happening now with those at similar stages in the trajectory of these earlier empires cannot be missed. 

All of them more or less followed the same trajectory - Age of Outburst (or Pioneers) followed by Ages of Conquest, Commerce, Affluence, Intellect, and Decadence. 

Under the system of empires each lasting for 250 years, the sovereign race has time to spread its particular virtues far and wide. Then, however, another people, with entirely different peculiarities, takes its place, and its virtues and accomplishments are likewise disseminated. By this system, each of the innumerable races of the world enjoys a period of greatness, during which its peculiar qualities are placed at the service of mankind...

The first stage of the life of a great nation, therefore, after its outburst, is a period of amazing initiative, and almost incredible enterprise, courage and hardihood. These qualities, often in a very short time, produce a new and formidable nation. These early victories, however, are won chiefly by reckless bravery and daring initiative... when a little-regarded people suddenly bursts on to the world stage with a wild courage and energy. Let us call it the Age of the Pioneers... these new conquerors acquired the sophisticated weapons of the old empires, and adopted their regular systems of military organisation and training. A great period of military expansion ensued, which we may call the Age of Conquests. The conquests resulted in the acquisition of vast territories under one government, thereby automatically giving rise to commercial prosperity. We may call this the Age of Commerce.

The Age of Conquests, of course, overlaps the Age of Commerce. The proud military traditions still hold sway and the great armies guard the frontiers, but gradually the desire to make money seems to gain hold of the public... The wealth which seems, almost without

effort, to pour into the country enables the commercial classes to grow immensely rich. How to spend all this money becomes a problem to the wealthy business community. Art, architecture and luxury find rich patrons. Splendid municipal buildings and wide streets lend dignity and beauty to the wealthy areas of great cities... The first half of the Age of Commerce appears to be peculiarly splendid. The ancient virtues of courage, patriotism and devotion to duty are still in evidence. The nation is proud, united and full of self- confidence. Boys are still required, first of all, to be manly—to ride, to shoot straight and to tell the truth. Boys’ schools are intentionally rough. Frugal eating, hard living, breaking the ice to have a bath and similar customs are aimed at producing a strong, hardy and fearless breed of men. Duty is the word constantly drummed into the heads of young people... money is the agent which causes the decline of this strong, brave and self-confident people. The decline in courage, enterprise and a sense of duty is, however, gradual. The first direction in which wealth injures the nation is a moral one. Money replaces honour and adventure as the objective of the best young men. Moreover, men do not normally seek to make money for their country or their community, but for themselves. Gradually, and almost imperceptibly, the Age of Affluence silences the voice of duty. The object of the young and the ambitious is no longer fame, honour or service, but cash.

Education undergoes the same gradual transformation. No longer do schools aim at producing brave patriots ready to serve their country. Parents and students alike seek the educational qualifications which will command the highest salaries... the transition from the Age of Conquests to the Age of Affluence is the spread of defensiveness. The nation, immensely rich, is no longer interested in glory or duty, but is only anxious to retain its wealth and its luxury... The merchant princes of the Age of Commerce seek fame and praise, not only by endowing works of art or patronising music and literature. They also found and endow colleges and universities... the vast expansion of the field of knowledge achieved by the Age of Intellect seemed to mark a new high-water mark of human progress... Perhaps the most dangerous by-product of the Age of Intellect is the unconscious growth of the idea that the human brain can solve the problems of the world... Another remarkable and unexpected symptom of national decline is the intensification of internal political hatreds... in the Ages of Commerce and Affluence, every type of foreigner floods into the great city, the streets of which are reputed to be paved with gold... Second- or third-generation foreign immigrants may appear outwardly to be entirely assimilated, but they often constitute a weakness in two directions... As the nation declines in power and wealth, a universal pessimism gradually pervades the people, and itself hastens the decline...

Age of Conquests often had some kind of religious atmosphere, which implied heroic self- sacrifice for the cause. But this spirit of dedication was slowly eroded in the Age of Commerce by the action of money. People make money for themselves, not for their country. Thus periods of affluence gradually dissolved the spirit of service, which had caused the rise of the imperial races. In due course, selfishness permeated the community, the coherence of which was weakened until disintegration was threatened. Then... came the period of pessimism with the accompanying spirit of frivolity and sensual indulgence, by-products of despair... The heroes of declining nations are always the same—the athlete, the singer or the actor... Decadence is a moral and spiritual disease, resulting from too long a period of wealth and power, producing cynicism, decline of religion, pessimism and frivolity. The citizens of such a nation will no longer make an effort to save themselves, because they are not convinced that anything in life is worth saving... Past empires show almost every possible variation of political system, but all go through the same procedure from the Age of Pioneers through Conquest, Commerce, Affluence to decline and collapse.

The emergence of a new empire is generally abrupt, the result of an outburst of energy, led by conquerors who overthrow decadent incumbents,

(In the year 600 AD) The Arabs were then the despised and backward inhabitants of the Arabian Peninsula. They consisted chiefly of wandering tribes, and had no government, no constitution and no army. Syria, Palestine, Egypt and North Africa were Roman provinces, Iraq was part of Persia. The Prophet Mohammed preached in Arabia from A.D. 613 to 632, when he died. In 633, the Arabs burst out of their desert peninsula, and simultaneously attacked the two super-powers. Within twenty years, the Persian Empire had ceased to exist. Seventy years after the death of the Prophet, the Arabs had established an empire extending from the Atlantic to the plains of Northern India and the frontiers of China.

At the beginning of the thirteenth century, the Mongols were a group of savage tribes in the steppes of Mongolia. In 1211, Genghis Khan invaded China. By 1253, the Mongols had established an empire extending from Asia Minor to the China Sea, one of the largest empires the world has ever known.

The Arabs ruled the greater part of Spain for 780 years, from 712 A.D. to 1492. (780 years back in British history would take us to 1196 and King Richard Cœur de Lion.) During these eight centuries, there had been no Spanish nation, the petty kings of Aragon and Castile alone holding on in the mountains. The agreement between Ferdinand and Isabella and Christopher Columbus was signed immediately after the fall of Granada, the last Arab kingdom in Spain, in 1492. Within fifty years, Cortez had conquered Mexico, and Spain was the world’s greatest empire.

Sample his early reflections on the European Project,

The present attempts to create a European community may be regarded as a practical endeavour to constitute a new super-power, in spite of the fragmentation resulting from the craze for independence. If it succeeds, some of the local independencies will have to be sacrificed. If it fails, the same result may be attained by military conquest, or by the partition of Europe between rival super- powers. The inescapable conclusion seems, however, to be that larger territorial units are a benefit to commerce and to public stability, whether the broader territory be achieved by voluntary association or by military action.

This about human intellectual hubris, global citizenhood etc is so relevant for today,

Perhaps the most dangerous by-product of the Age of Intellect is the unconscious growth of the idea that the human brain can solve the problems of the world. Even on the low level of practical affairs this is patently untrue. Any small human activity, the local bowls club or the ladies’ luncheon club, requires for its survival a measure of self-sacrifice and service on the part of the members. In a wider national sphere, the survival of the nation depends basically on the loyalty and self-sacrifice of the citizens. The impression that the situation can be saved by mental cleverness, without unselfishness or human self-dedication, can only lead to collapse. Thus we see the cultivation of the human intellect seems to be a magnificent ideal, but only on condition that it does not weaken unselfishness and human dedication to service. Yet this, judging by historical precedent, seems to be exactly what it does do. Perhaps it is not the intellectualism which destroys the spirit of self-sacrifice—the least we can say is that the two, intellectualism and the loss of a sense of duty, appear simultaneously in the life-story of the nation.

As also this about the complacency with the progress achieved in our times,

The belief that their nation would rule the world forever, naturally encouraged the citizens of the leading nation of any period to attribute their pre-eminence to hereditary virtues. They carried in their blood, they believed, qualities which constituted them a race of supermen... In recent years, the idea has spread widely in the West that ‘progress’ will be automatic without effort, that everyone will continue to grow richer and richer and that every year will show a ‘rise in the standard of living’. We have not drawn from history the obvious conclusion that material success is the result of courage, endurance and hard work—a conclusion nevertheless obvious from the history of the meteoric rise of our own ancestors.

Some Indian empires and their duration - Mauryas -142 years (322-180 BC); Kushans - 237 years (30-267); Guptas - 243 years (300-543); Chalukyas (Badami) - 210 years (543-753); Delhi Sultanate - 320 years (1206-1526); Mughals - 331 years (1526-1857); Marathas - 153 years (1645-1818).

Whether the duration of these cycles is 250 years or something else, it follows natural phenomena in general - growth, stability, and decay. In the Hegelian dialectic, it would be thesis, anti-thesis, and synthesis.

The interpretation of such histories present an intriguing choice. One approach is to view them as historical descriptors of cycles associated the rise and fall of empires. They put the evolution of empires in perspective, as a dynamic phenomenon and not confuse the present with the permanent. There is something inexorable about this dynamic. Each of Glubb Pasha's Ages are just but a stage in the evolution of the empire.

The other approach takes a more static view of the empire. In this approach, the prevailing ideology conveys something permanent or universal. This leads to the inevitable emergence of the two camps of proponents and opponents. The result is bitter battles for ideological supremacy over values, cultures, and truth itself. Supporters of an Age consider its values and attributes as the climax of progress (The End of History, as some would claim!).

Heisenberg's Uncertainty Principle and performance management

Heisenberg's Uncertainty Principle states that it is impossible to simultaneously measure with precision the position and velocity of a particle. Intuitively, say, once a light is shined on a particle to expose its position, the associated energy invariably has the effect of displacing the particle, thereby changing its velocity. And so on. Smaller the particle, more pronounced the dissonance effect.

There is an remarkable similarity between this Principle and to the monitoring of performance data, especially for many types of activities where credible performance measurement is difficult. While this is true in general, it is pervasive in governments since the outcomes of many activities of public agencies are dependent on human engagement intensity or quality and thereby struggle with quantification.

In such cases, as the stakes associated and complexity of data capture increases, the reliability of the data collection decreases. Or, higher the stakes, lower the accurate informational content of the data. 

It is because once managers start looking at data to monitor performance, those being monitored start manipulating the data being collected. The extent of manipulation only increases with rising stakes and intensity of monitoring.

In other words, in many cases involving quality, it is extremely difficult to both accurately capture data and use that data to credibly assess performance. And to do this at scale and sustainably is an even bigger challenge.

Ironically, the use of technology makes this even more challenging. One, it increases the opportunities for gaming data management, besides making it easier too. Two, the associated information overload can end up crowding-out critical and relevant information. Finally, the elegance and neatness of a Dashboard creates an illusion of control that lulls users into complacency about the problems that accumulate. In the words of people who have used them all their professional lives, even if the quality of the data is good, they "confer limited control", "defocus issues", "put too much not the plate". Most tellingly, "they drive people away from performing to looking good"!

This is not an argument against not measuring performance data, but being conscious about the serious limitations of such data. It is a note of caution against those who believe that chronic state capacity failures can be overcome by data analytics and Dashboards. 

One of the strategies often suggested is to have the data extracted from a work-flow management solution. This is obviously a better alternative to the strategy of direct collection and capture of data only for the purpose of monitoring (as against also work-flow management). This is bread and butter stuff in businesses, where both work-flow management and monitoring dashboards are integrated. But the neatness disappears for many government activities for a variety of reasons. Further, once this is adopted, the incentives get diverted to gaming the work-flow itself. And given the less-than-neat nature of work-flow in public systems, the process of subverting is relatively easier. Furthermore, once you fix a node in the work-flow, the subversion merely shifts to another node. And given the limited time and patience to persist and iterate, we end up with deeply compromised work-flow management and monitoring Dashboards. But there are limits to its application in most development settings. 

None of this is to say we should eschew Dashboards nor to suggest that it is impossible to develop reasonably effective Dashboards. There are design choices and mechanisms available to develop satisfactory enough Dashboards. But they are far more nuanced and iterative than what pretty much all the prevailing attempts at making Dashboards employ. And then there is the Heisenberg's Principle to be overcome. 

Dani Rodrik on the post-pandemic world

Dani Rodrik has a great INET interview where he looks at the post-pandemic world. Very few scholars can pack in so much texture on important things that affect all of us into just an interview. 

He points to three trends which have accelerated and have been clarified by the pandemic - rebalancing of state and market; rebalancing of nation state and globalisation; and the end of the current growth model for developing countries.

On developing countries,

their underlying growth model is also very much under threat and I think they’ll have to change their growth strategies. They have to adjust to the reality of much lower growth rates going forward with everything that that entails in terms of the difficulties of creating jobs for young population and so forth... Growth in the developing world was coming down as many of the previous growth engines such as increases in domestic demand or increases in public investment or commodity prices which were your typical drivers of growth in low income and middle income countries in the last couple of decades, those were already losing their potency. Again, it’s an acceleration of pre-existing trends.

On immediate responses, he says,

We need a much larger scale standstill on debt service to the creditors of developing nations that should cover all sovereign debt service and that should be sanctioned by the G20 and multilateral institutions... The idea is to use those resources that would otherwise go to creditors in the developed world to make those resources available for urgent public health and economic needs in the developing world... There has not been, despite some proposals, there has not been an expanded SDR allocation, special drawing rights, to increase multilateral liquidity for developing countries. I think some people also have recommended, and I agree with them, that there should be multilaterally sanctioned capital controls, which is to say give developing countries the option of preventing capital outflows, panic outflows in a way that would not stigmatize them because if the IMF or the G20 sanctions to use those capital controls it would be a way of avoiding stigma.

On globalisation,

The only question is about getting the right level of globalization and different policy domain calls for different levels of globalization and in some areas we have gone too far. I would say that in the context of many of the WTO agreements on subsidies, on investment related measures and many aspects of trade agreements on intellectual property rights, rules with respect to capital account liberalization, we’ve gone way too far. Even within economic globalization there are areas where I don’t think we’ve gone nearly far enough in trying to construct a global order, so one glaring area that we have been missing is addressing tax havens. That’s another area where, I think, it’s a very good economic argument for why we should have some common rules that prevent essentially beggar thy neighbor policies by very small jurisdictions being able to shift paper profits from paper headquarters for their jurisdictions at the expense of very large tax losses for other larger countries.

On global citizen hood,

... if you have large corporations and the super rich and the professional classes, once they start viewing themselves as part of this global network with neither the need nor the necessity to be part of their own local communities or to invest in those communities, on the one hand you’re drawing them away because they become these mythical global citizens. I say mythical because there’s obviously no true global citizenship. Global citizenship is just a way of saying that I’m part of this broader community, even though, of course, you are not paying any taxes to a global government. There are really no true obligations. On the one hand you draw these classes and groups of individuals and corporations that are globally networked away from their societies and then left behind the middle and lower middle classes who don’t have access to those networks or the assets to prosper in a global economy. They’re also being left to withdraw into their own shell. That’s when you get, I think, a very ripe environment for a right wing populist movement to leverage that by drawing distinctions between a globalist elite and to true people and blaming foreigners, the immigrants and ethnic minorities for the problems of the lower and middle class.

This on the missing left wing movement is instructive,

Why has the left not been able to develop a program to respond to these economic and social ills and to these problems of despair, economic insecurity, lack of good jobs in the non major metropolitans of the countries that were not benefiting or falling behind. I think part of the answer at least, I think, has been quite nicely identified by Thomas Piketty, who shows that essentially the center left parties, the Democratic Party in the United States and social democratic parties with Labor in the UK, increasingly became parties of the more educated elite and, as they became… They took on the policy agendas of the educated elite, which was maybe emphasize issues having to do with social liberalism but also take on the educated elite’s views that we live in this global economy and everybody has to adjust and essentially, as you say, blamed the victim so if jobs were going scarce the answer was for these people just to get a better education or to behave more responsibly, but that none of the problem was with the global economic regime that we had set up and very little of it was with the existing arrangements of government economic policy which was really falling behind in terms of responding to these problems.

On the US-China relations he draws parallels from the peaceful co-existence detente between the US and USSR during the Cold War,

I think the analogy in the economic sphere for US and China is something similar and you might call it a model of peaceful economic coexistence, which is that the United States understands that China has its own model and therefore stops pushing China to change its policies towards its state enterprises, intellectual property rights, its subsidies, its regulations in a way that could conform to the US expectations about what an open economy is. By the same token, China understands that it does not have this permanent right to access the US market on hyper-globalist terms that the United States might also pursue its own social objectives with respect to protecting some labor markets or some communities. It might want to protect the integrity of its own education system and technologies and therefore have appropriate regulations that limits access to China when it is needed.

I slightly disagree with Rodrik here. This approach is only a lighter version of the appeasement that the likes of Robert Zoellick spearheaded when they thought that the best strategy against China was to integrate it into the global economic and political system and that would create the conditions for weakening of the Communist Party's hold and usher in political liberalisation in China. That approach, as former National Security Advisor H R McMaster, recently acknowledged has failed.

To be fair, Rodrik acknowledges it

I think clearly one of the ongoing trends is the dissipation of these narratives of how more trade and more economic integration would necessarily push countries in a growth and economic liberal direction. Also, the expectation that it would push China to be more democratic, that was also the political side of the story that China was supposed to become more like “us” in terms of its political system as it became an export powerhouse and became part of the global economy.

In fact, many of the things that Rodrik describes about the Democratic Party's compromise with elites applies just as well to the interviewer Rob Johnson's sympathy with China.

This about the hegemony of the elite narrative is critical,

Actually I think a bigger capture is what I might call a narrative or cognitive capture which is capturing the story, being able to tell the story and that will make governments act in a way that furthers the interest of those groups. By and large the reason that we’ve reduced corporate taxes, and by and large the reason that the only way that governments can imagine how to bring jobs to certain depressed regions is by creating these opportunity zones where you’re providing huge tax breaks to corporations to benefit in terms of producing very few benefits in terms of jobs. The reason that happens is not necessarily because these corporations are buying those policies in terms of low taxes or these incentive programs, it’s because governments, along with the rest of society, have bought into a particular narrative that that’s what good policy is. Good policy is lower taxation which is perfectly okay for corporations to be run for the benefit of their shareholders and if you want some corporation to act any differently, to create employment, you have to give them a whole lot of money to change their incentives.

This is an important framing about how we look at businesses,

Corporation is a legal construct. It’s a privilege that the state provides an investor to protect those investment rights and historically it’s always been that that privilege is provided in return for some good that the corporation provides to society. Early on it used to be that the corporation that the crown would create would generate wealth that it would share with the sovereign, with the crown. Later we developed this idea that the public interest went beyond the crown. It was society at large. The last few decades we completely forgot the quid pro quo and we just give corporations these privileges, not simply these legal protections and legal privileges, but also all the public infrastructure that they need access to, a trained workforce, access to a wide range of legal services, access to infrastructure, access to courts, access to innovation system and R&D spending on the part of the public sector. This is a natural thing but in return, corporations really don’t have to act as responsible citizens, don’t have to invest in local communities, invest in their suppliers, provide basic labor protections and treat their workers well.

A plan of action for restoring post-lockdown normalcy

This is in continuation to posts here, here, and here. This post will summarise certain emergent realities of the Covid 19 world, a possible exit strategy from the lockdown, and some possible opportunities.  

The strict lockdown in countries like India was a necessary (perhaps even inevitable) response to a disease about which little else was known except its rapid infection rate. But its relevance wore off after the first few weeks when some unmistakable global trends, especially on deaths, emerged and the economic destruction and human suffering due to the lockdowns became clear.

Certain things have to be acknowledged. One, the likes of hand washing, social distancing, and mass testing are just impractical in large parts of any developing country, especially in the most vulnerable and densely populated areas and among the poor. Besides its practical challenge, testing has technical problems. 

Two, when you have reached the stage of community transmission, as is the case in most countries, the likes of contact tracing too becomes ineffective. The value of contact tracing Apps, apart from serious question marks about adoption, technology, accuracy, and privacy concerns, also run into the practical challenge of administration once the numbers increase beyond a point. 

Three, it is difficult to believe that anybody takes seriously the number of cases being reported anywhere in the world. They are off by orders of magnitude, perhaps 100 times or more. So asymptomatic cases are everywhere. Testing and detecting them is neither practical nor desirable.  Whether we like it or not, it is the reality. 

Finally, unlike a few days back when I blogged this, I do not now believe that even the scenarios of relapses should be met with lockdowns. It's just impractical to do micro-surveillance at scale by weak state capacity systems. However, having some form of protocol of options to respond to different emergent situations is part of prudent emergency response drills. We will need to keep options open and respond to situations as they come. Lockdowns should be last resort responses. 

In fact, I'll only be surprised if this list of exclusions does not grow in the weeks ahead. For example, even the use of elaborate PPE (as opposed to basic protections) by health staff will start to look impractical. Or pooled testing by employers too could become impractical and superfluous as the devil in its operational details become apparent. 

This, by the way, is in the truest traditions of iterative adaptation of policy responses to a completely uncertain situation. 

In the circumstances, the time may have come to accept the reality of Covid 19 as the latest addition to the several diseases that human beings cohabit with and whose episodic outbreaks are not uncommon. We have to learn to co-exist with SARS-Cov-2 like we have done with numerous others before. This too shall pass.

So, here is a course of action for developing countries like India:

1. Make the use of masks in public places mandatory. These can be simple hand kerchiefs or some some part of a cloth. A culture of mask wearing may be one of the conspicuous new normals. 

2. Screen for symptoms of Covid 19 and use a defined treatment protocol (like the three-level treatment in India). Similar practical protocols for both virus and antibody testing can be adopted. 

3. Mandate home isolation for those with symptoms. Also make home quarantine mandatory for those coming into the state. They can be followed-up through regular daily telephone calls.    

4. A small share of detected cases will need real hospital care, and a tiny proportion will need tertiary care or ventilators and ICUs. Make a very liberal assessment and keep those beds and hospitals with equipment ready. Release the remaining parts of health care system immediately for their regular activities.

5. The old and immuno-compromised people should take precautions just the same way as they would do in any particular season of very bad infectious disease outbreaks. Households should be left to figure out what can be done based on their circumstances. I'm not sure there is much the government can do in this regard. 

6. Finally, and this is very important, there is need for a very aggressive outreach campaign by politicians and officials, with support of media and opinion makers, to de-stigmatise Covid 19. While people need to be conscious of its risks, we appear to have reached a stage when fear and paranoia is triggering social tensions and mental health problems. The hitherto scary narrative around Covid 19 has to be replaced with one which is based on emergent evidence. People need the reassurance of a comforting narrative about Covid 19, one which while does not down-play its risks, places them in its true perspective. The fear psychosis has to be dispelled and only the government can do that, though with the support of civil society. 

With these precautions, the economy should be allowed to resume normalcy by gradually phasing in activities over a period no longer than a month. Schools should be re-opened and education resumed after the summer holidays. Factories too should be re-opened. Shops and establishment should be allowed to resume operations. Staggered resumption of businesses, while logical, is impractical in many businesses, besides further weakening the recovery. However, where possible, it could be done. Perhaps some like mass entertainment can be postponed for longer. Mass transit too should be allowed to resume operations immediately, with some gradual phasing towards the normal. All these should be left to state governments, with some broad principles outlined. 

Even if full operations are allowed, given the fear around Covid 19, normalcy will take time. As experience from elsewhere in the world shows, even without government restrictions, there will be an inherent self-limiting dynamic to lockdown exit. People will not immediately come out and shop or go to office. Businesses will take time to remobilise. Migrants too will return only slowly. This too will allow normalcy to be phased in naturally. 

As to those proclaiming new normals, for sure, there will be some behaviour and other changes with the rich and even middle-class, who can afford those changes. Covid 19 would have accelerated or tipped over certain trends like work from home or reductions in executive travel. But for the vast majority of those less fortunate, it is difficult to believe that much would change, except for greater immediate misery. These changes will be mirrored in developed and developing countries accordingly.

But the lockdown exit may also be an opportunity to target certain long-term public policy goals, whose realisation would have been impossible otherwise. Foremost, given the humanitarian tragedy of migrants, it is the right time to push through a set of measures on the identification and their integration into local public services. While something on their accommodation would be good, I'm not sure about anything practical at scale. Another would be to encourage the permanent transition to a combination of workplace and work from home arrangements in some services sectors. It can have beneficial effects on traffic and housing affordability. 

It would be great if we could lockdown (no pun intended) some of the gains on reduced air and water pollution. What changes, which do not have harmful economic consequences, especially on the poor, are possible? I am not optimistic. What else? In any case, something for the central and state governments to examine.

Update 1 (29.05.2020)

This about the practical difficulties of the likes of social distancing for large numbers of urban households,

At least 92 million Indian households live in one room, sometimes six or eight in a space no larger than a cupboard. Work from home is a concept that means nothing. As entire universes are carried on wheels and the country’s largest exodus since Partition unfolds, some of our city-slicker slogans on hygiene and not-crowding are just new kinds of deracinated privilege. In Dharavi, Mumbai, where I spent a considerable number of days reporting, there are 8,000 common toilets for about eight hundred thousand people, which makes containing the virus an enormous challenge.

This is representative of workplaces and the practical difficulties with social distanced work,

“Look at my factory floor. Do you think my 175 workers can work together and still maintain one meter distance,” asks the owner of a factory that makes packaging for medicines and is working with about 50 people now. “The demand is tepid now, so we can manage with less production and people. But when demand improves, it will be difficult to adhere to social distancing guidelines. It is easy for policymakers to ask us to have shifts and rotation of employees, but these rules are difficult to execute,” he says.

Weekend reading links

1. The growing influence of China in Israel is worrying the Americans,

Even without military sales, China has grown to become Israel’s second-largest trading partner, after the U.S. In 2018, China imported more than $4.6 billion of Israeli goods, while exporting to Israel goods worth more than $10.9 billion. These numbers are up dramatically from 1992, when Chinese goods imports totaled only $38.7 million, and exports $12.8 million... In Israel, Chinese firms have been responsible for expanding the port in Ashdod, on the Mediterranean, and constructing major transportation systems, including the Tel Aviv light-rail system and the Carmel tunnels. A Chinese company has an exclusive contract to operate a new container terminal at the port of Haifa for 25 years beginning in 2021. And if a railway from Eilat, on the Red Sea, to Ashdod wins Israeli government approval, a Chinese company is poised to build it. Meanwhile, Chinese firms are active as business investors. Their investments in Israeli high-tech companies in 2017 totaled around $600 million, an impressive increase from $232 million in 2013.

2. The value of dissenting voice on Corona response - the case of Aaron Ginn, who led a campaign against the lockdown in the US.

3. The cost of school closures will become increasingly apparent in the days ahead. This from the Ebola induced school closures in West Africa,

More than 10,000 schools in Sierra Leone, Guinea and Liberia were closed during the 2014 epidemic to break the chains of transmission... Consequently, 50 lakh students in these countries were pulled out of classrooms. While schools in Sierra Leone were closed for nine months, those in Guinea and Liberia did not open for almost six months. By the time they reopened, students had lost roughly 1,848 hours of education, ranging from 33 weeks in Guinea to 39 weeks in Sierra Leone, according to the 2015 UNDP report on the socio-economic impact of the epidemic. Once the school gates reopened, many students did not return to the classrooms. According to phone surveys conducted by the World Bank, about 25% of the students in Liberia and 13% in Sierra Leone did not go back to school after reopening. Aside from the 30,000 children orphaned by the epidemic in the three countries, the school dropouts were attributed mainly to economic reasons.

See also this and this. Good primer in Indian Express about how schools in Europe are re-opening.

4. Market concentration and Mathew Effect, hedge funds edition,

Some two-thirds of the industry’s assets are now run by about 5 per cent of the managers, while just under half of the firms are small outfits that oversee under $100m, according to data group HFR.

5. The screws tighten on Huawei and its semiconductor affiliate HiSilicon,

On Friday the US commerce department said it would amend last year’s blacklisting to stop Huawei and its affiliates from buying computer chips that had been made or designed with US equipment. Any company that wishes to manufacture computer chips to Huawei’s designs with US tools now needs to apply for a licence. US machines from the likes of Applied Materials and Lam Research are used by about 40 per cent of the world’s chipmakers, while software from the likes of Cadence, Synopsis and Mentor is used by 85 per cent, according to Credit Suisse, which said it would be almost impossible to find a fabrication plant, or fab, that could still work with Huawei... Analysts believe the new regime will neuter HiSilicon, Huawei’s semiconductor affiliate and China’s largest chip design company.

Hitherto Huawei had been able to avoid US sanctions by buying its chips from TSMC's non-US fabs. Huawei has said that its survival is now at stake. A friend sent me the US Federal Register which outlines the sanctions here.

But The Economist feels that this round of sanctions too might not be effective. 

Huawei pays contract manufacturers to assemble its phones and base stations. The chips that tsmc makes for Huawei are sent to those companies, not to the Chinese firm, for integration. Finished products are usually sent directly to Huawei’s customers. Huawei need not touch the blacklisted chips at any point. This may get Huawei off the hook. Some lawyers note that the new restriction does not seem to apply to items sent to third parties and not destined for Huawei, even where these are being supplied at Huawei’s direction. Even if the legal experts are wrong, the rule will be difficult to enforce: the clean rooms of Asian chip foundries are hard to monitor.

6. NYT writes about the redemption of the Australian Prime Minister, Scott Morrison, in the wake of the country's impressive performance in tackling Covid 19.

Scientists, whom Mr. Morrison’s party has derided for over a decade, were respectfully asked for their views about the novel coronavirus and, more remarkable still, these views were acted on and amplified... A national cabinet was formed in which the states’ premiers (the equivalent of governors) from both the left and the right regularly met by video to plot the course of the nation through the crisis. In this way and others, a government that has been sectarian and divisive became inclusive... Australia’s per capita infection rate is now lower than that of New Zealand, which is much more frequently lauded. 

The economic response was as extraordinary. Civil servants who had been told they existed to serve politics and politicians also found their expert advice heeded. A huge relief package of direct fiscal stimulus was rolled out, amounting to 10.6 percent of the country’s gross domestic product — second only in the world to Qatar’s (13 percent). Unemployment benefits were doubled, a generous (though not universal) program of wage subsidy was introduced and child care was made free — all measures that only a few months ago Mr. Morrison’s party would have pilloried as dangerous socialism. The stimulus plan was designed after negotiations with various civil society groups, including the trade unions. “There are no blue teams or red teams,” Mr. Morrison said in early April. “There are no more unions or bosses. There are just Australians now; that’s all that matters.”

7. FT has an article on debt burden in emerging market economies

Investor demand for higher returns has allowed smaller, lesser-developed and more vulnerable “frontier” countries to tap bond markets at a record pace in the past decade. Their debt burden has climbed from less than $1tn in 2005 to $3.2tn, according to the Institute of International Finance, equal to 114 per cent of GDP for frontier markets. Emerging markets as a whole owe a total of $71tn.

And China is now the largest creditor to developing countries

8. Independent central banks were nurtured to ensure that irresponsible politicians do not inflate their way. Now the time may have come to save the world from central banks themselves. Sample Adam Tooze,

Rather than obstreperous trade unions and feckless politicians, what central bankers have found themselves preoccupied with is financial instability. Again and again, the financial markets that were assumed to be the disciplinarians have demonstrated their irresponsibility (“irrational exuberance”), their tendency to panic, and their inclination to profound instability. They are prone to bubbles, booms, and busts. But rather than seeking to tame those gyrations, central banks, with the Fed leading the way, have taken it on themselves to act as a comprehensive backstop to the financial system—first in 1987 following the global stock market crash, then after the dot-com crash of the 1990s, even more dramatically in 2008, and now on a truly unprecedented scale in response to COVID-19. Liquidity provision is the slogan under which central banks now backstop the entire financial system on a near-permanent basis.

9. It is difficult not to consider the hundreds of thousands of migrants walking back long distances in the heat in India as nothing less than a humanitarian disaster. 

10. The decision to de-regulate the APMC Act and EC Act is unlikely to change the situation much without complementary reforms. The binding constraints are more deep and structural in nature, as Mekhala Krishnamurthy writes, and previous efforts have not been promising,  

Complete deregulation, as we have seen in the decade following Bihar’s repeal of its APMC Act in 2006, does not necessarily transform agricultural markets and spur competition. Even after all restrictions were lifted, there was little uptake in direct procurement by formal players in the state. When corporations entered the maize market in a big way, they chose to buy from larger traders and aggregators and not from farmers. Most farmers have seen little change in marketing practice and continue to sell to village traders as they had done before the repeal. Where private markets have emerged — mainly for horticultural produce — they are constituted and run by local traders and commission agents. But across the system, traders complain about deteriorating infrastructure while the regulatory vacuum has led to the proliferation of brokers to deal with counter-party risk in growing and dynamic commodity markets such as maize...

Against the popular demonisation of small traders and intermediaries, over a half-century of scholarship on India’s agricultural markets has shown that they exist — and persist — because they are able to respond — in cash, credit, time and place — to the multiple needs of farmers and firms across the interconnected domains of production, marketing, processing and consumption. This is not to say that they do not exploit farmers when the opportunity arises. It is to point out that new, organised and technologically driven procurement and marketing systems will only work as actual options for producers if they manage to address the real constraints that farmers face on the ground, especially access to credit, inputs, storage, transport, and timely payments. Most of these constraints originate in the relations of land ownership and access and the limits and exclusions they impose on smallholding farmers and landless cultivators. Simply put, farmers will not be in a position to exercise any newly granted regulatory freedom in the market if they cannot overcome these constraints. Equally, while increasing competition for intermediaries is desirable, their elimination is a misguided — and indeed dangerous — objective if one does not respect or replace the roles and risks that they cover.

This is another older article on the same issue. 

11. Finally (HT: Ananth), the results of the pandemic lockdown in Europe till date shows very little difference in outcomes based on the strategy adopted. A Bloomberg article writes,

Some — above all Italy and Spain — enforced prolonged and strict lockdowns after infections took off. Others — especially Sweden — preferred a much more relaxed approach. Portugal and Greece chose to close down while cases were relatively low. France and the U.K. took longer before deciding to impose the most restrictive measures. But, as our next chart shows, there’s little correlation between the severity of a nation’s restrictions and whether it managed to curb excess fatalities — a measure that looks at the overall number of deaths compared with normal trends.

The lessons for future likely shutdowns from relapses,

The Covid-19 experience has taught us that it’s far better to respond quickly and smartly, with the right technology and mass testing and tracing, rather than only relying on the crudest of shutdowns.

India business concentration fact of the day

If you thought business concentration was a western phenomenon, wait till you see this on India, from The Economist,

In America 20 companies capture roughly a quarter of all corporate profits. If you thought that was sobering news for budding American capitalists, spare a thought for their Indian counterparts. According to a study by Marcellus Investment Managers, a Mumbai-based firm, last year a score of companies accounted for nearly 70% of India Inc’s total earnings, up from 14% three decades ago (see chart). In a growing number of product categories—from paint and adhesives to biscuits and baby formula—monopolies or duopolies skim off 80% of profits.

In other words, just 20 companies took nearly 70% of profits of corporate India in 2019, up from just 14% three decades back, and compared to nearly 25% in the US!

Update 1 (08.08.2020)

From Arjun Srinivas in Livemint, on business concentration in India,

An analysis of 2035 listed companies across 298 industry groups shows that in up to 100, or 33% of all industry groups, there is one single company that controls over 50% of the net sales in the sector. Even with a stricter definition—at 70% of the net sales—there are still 50 or 17% of industries which have a dominant firm, according to data sourced from Capitaline... Data shows that while the number of industries or sectors with dominant firms has declined—as it often does in an expanding economy—the dominant firms’ market cap in their respective industries has increased correspondingly.

And it extends to the digital economy, as elsewhere,

... estimates indicate that Facebook and Google together mop up 68%of India’s digital ad market revenues, while Amazon and Flipkart serviced 90% of all e-commerce orders during the 2019 festival season period in October.

This balance sheet of the Competition Commission of India (CCI) should be a matter of concern,  

Since its inception, till 31 March 2019, the CCI has noted 1008 instances of ‘anti-trust’ matters, meaning, instances of anti-competitive practices. Over 20% of these cases have been in the real estate sector, followed by automobiles at 10%. In the year 2018-19 alone, the CCI received 68 cases related to anti-competitive agreements and abuse of dominant position. It passed prima facie orders in 65 of these cases and completed investigation in 51 instances and imposed penalties to the tune of ₹357.85 crore. However, merely ₹1.41 crore was actually realized as on 31 March 2019. This is because most of the orders of the CCI are under appeal before the National Company Law Appellate Tribunal (NCLAT) or under challenge in the high courts or the Supreme Court.

Over the past 10 years, the CCI has imposed penalties amounting to ₹13,381 crore, but less than 1% of that amount (about ₹127 crore) has been actually realized (See chart 2). Shockingly, ₹66 crore, or over half of this fine amount, has been refunded to the offending parties. In August 2016, the CCI had imposed its largest-ever penalty of over ₹6,700 crore on 11 cement companies and their trade association, Cement Manufacturers Association, for cartelization and fixing prices. Even though this fine was upheld by the NCLAT, the Supreme Court in 2018 stayed this order, directing the companies to pay only 10% of the penalty amount. 

Update 2 (28.08.2020)

More market concentration facts from Indian economy,

An analysis of Capitaline database of over 1,000 listed firms over the last five financial years till March 2020 across sectors show the share of top five players on the rise. Between FY16 and FY20, the top five cement players have added over 8 percentage points to their share of the sector’s total sales. For the comparable period, the gain for the top five was over 4 percentage points for banks (in terms of interest income), 3.5 percentage points for metal players, 3 percentage points for capital goods, 2 percentage points for oil & gas players. Even in an already consolidated industry like IT, the big five upped their share by over 2 percentage points. The only outliers were pharmaceuticals (loss of 3.5 percentage points), auto (1.6) and realty (1.4). Management consultant Bain & Company’s most recent India Mergers & Acquisition Report too points to the big getting bigger trend. In steel, the top five players increased their share of production by 7 percentage points between FY14 and FY19. For a comparable period, the top five power producers increased their share of installed capacity by 5 percentage points, and the top three telecom firms by almost 20 percentage points in terms of subscribers, according to the Bain report.

Update 3 (14.09.2020)

Business Standard has more market concentration facts,

India is “hyper-Pareto” with the largest 15 per cent of listed businesses generating over 90 per cent of revenue and profit. In Q1, 2020-21, for a sample of the 1,700 largest listed businesses, the top 30 firms by revenue generated over 53 per cent of all revenues and over 73 per cent of profits after tax. The top 100 firms generated 78 per cent of revenues and 72 per cent of profits. Further, the top 250 firms (encompassing all large-caps and mid-caps) generated 91 per cent of revenues and 96 per cent of net profits.

Update 4 (25.09.2021)

Livemint writes that just five companies alone took home 21% of all profits earned by 2863 listed companies across 20 broad industries in 2020-21, up from 17% six years back. In 11 out of 13 industries where top five firms made up 75% or more of market share, market concentration in terms of profits increased during the Covid year.

It increased with respect to revenues too. 

This is in line with rising market concentration globally too, like in the US.