Trust and crisis management in India under COVID-19

Authors: Oindrila Dey, Indian Institute of Foreign Trade and Debalina Chakravarty, St Xavier’s University

Over the past year, India has gone through several lockdowns, resulting in the collapse of market operations and the almost complete cessation of all major economic activities. On 10 June 2021, the monthly moving average urban unemployment rate was 15.4 per cent. This severely jolted GDP growth, which fell to a four decade low of -7.3 per cent.

To restore economic stability, efficient government intervention is needed. But efficient intervention is dependent on citizens’ trust in the institution of government. Almost 35 per cent of the world’s population live in autocratising nations and as a result people are losing trust in government and putting their faith in institutional community activities.

In India, crowdfunding from big corporate houses and even small pensioners has helped run community kitchens and provide primary health care to COVID-19 patients through social communities, religious communities or student wings of opposition political parties.

The Indian government has performed inefficiently in its attempts to confront COVID-19 related issues, seen in its approach to vaccine exports and its decision to hold election rallies amid rising infections. On the one hand, trust in government is shaky in India due to policy oversights and, on the other, people are highly dependent on the public provision of vaccines.

According to the ‘Gandhian concept of trusteeship’, people with a steady income can be swayed to part with their wealth to help marginalised sections of society. The responses of urban salaried citizens to government and social initiatives during the pandemic were captured via a recent online survey. During a crisis, 47 per cent of respondents expect the government to provide relief faster than the community, but around 45 per cent believe that community service would reach those who need it more quickly. These numbers reveal that the institutional services rendered by both the public and private systems are clearly important.

Almost 90 per cent of people want a relief fund to be planned for in the government budget so that it can be financed primarily by taxpayer money. Citizens also believe that the government should finance the relief work through Member of Legislative Assembly Local Area Development Funds, voluntary contributions from citizens and voluntary contributions from big corporate houses.

Trust in government medical facilities reached a high of 70 per cent during the COVID-19 pandemic. But a lack of government facilities is also a widely recognised problem. Interventions like a ceiling on prices charged for treatment and diagnosis in private medical facilities and a partial subsidy for treatment and diagnosis in private hospitals were expected.

India saw substantial voluntary contributions towards government relief funds during the initial months of the pandemic. But when issues involve the proper utilisation of funds, most respondents expect that less than 60 per cent of funds raised for government relief programs reach beneficiaries. In contrast, likely 80 per cent of the funds raised by social communities are effectively used.

Interestingly, trust in social and governmental institutions appears similar in terms of leakage. Over half of respondents believe that there would be around 10 per cent leakage in both systems. This data highlights the tolerance of corruption by the urban educated citizens of India. Also the majority of individuals agree that there should be government intervention in every way possible in the economy — be it unemployment benefits, financial support to enterprises, provision of childcare, health care or public distribution schemes.

People support government intervention, but when asked whether they would seek support from the government during a crisis, a higher proportion of responses were negative. In cases of crisis related to job security, people prefer legal systems, job agencies and social media as external support systems to help fix the issue rather than depending on state institutional support. Although individuals expect government interventions, they do not rely on the government entirely during times of crisis, perhaps fearing that their expectations might not be met.

Contributions to the community are voluntary and the uses of funds are traceable to an extent. Fund allocation to communities also creates a feeling of reciprocity. People know that when in need, they have the support of both the community and the government.

Contributions to local communities also help generate in-group identities and stretch the realms of altruism. The role of government funds is unquestionable but often non-traceable. Yet, trust in the government is still strong when essentials need to be delivered to remote places.

Some government networks and organisations cannot be substituted by any other mechanism. But during a crisis, trust in community services is also very strong. This is the right time to cash in on the trust in these institutions and establish strong links between the government and community services. An integrated support system could serve the nation holistically throughout the remainder of the COVID-19 crisis.

Oindrila Dey is Assistant Professor in the Department of Economics at the Indian Institute of Foreign Trade, Kolkata Campus, and Fellow in the China-India Visiting Scholars Fellowship at Ashoka University.

Debalina Chakravarty is Assistant Professor of Economics in the Faculty of Arts and Social Studies at St Xavier’s University, Kolkata.

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