Compensating death ex gratia for covid victim kin raises many thorny questions fiscally and ethically

Compensating death ex gratia for covid victim kin raises many thorny questions fiscally and ethically

With the National Disaster Management Authority recommending Rs 50,000 as ex gratia compensation to the kin of Covid victims to be paid from the State Disaster Response Fund, an administrative challenge awaits state governments. India’s official Covid death toll is inching close to 4.5 lakh signifying a payout of nearly Rs 2,250 crore from the state kitty. GoI contributes 75% to each state’s SDRF except for hill states and NE states, where its share is 90%. There are a number of questions.

First, the ex gratia order doesn’t account for patchy certification of Covid deaths, particularly during the virulent second wave. Poorer citizens were most often the victims of this process. Ex gratia payments will most likely elude them. Second, even if the Rs 29,983 crore corpus addition to SDRF this fiscal seems adequate for ex gratia payments, it needs to be kept in mind that expenses related to recurring notified disasters such as droughts and floods will also have to be met. Therefore, a potential outcome is that perverse incentives can creep in. In a year of fiscal stress, undercounting of Covid deaths may continue. That will be particularly unfair to vulnerable citizens.

Third, there’s the issue whether ex gratia should have been limited to poorer citizens, just like welfare benefits are. Neither SC nor GoI seems to have given this a thought. A Rs 50,000 payout for a daily wager’s family can make a real difference, not so for a senior corporate executive’s family. Fourth, some opposition-governed states are saying the Centre has passed the buck. Given that ex gratia here is open-ended, and no one knows how the pandemic will play out, the Centre may think of creating a special fund for this.

Fifth, there’s also the question why other disease-related deaths should not attract ex gratia payments. In a country with poor public health and extremely unequal access to quality private healthcare, Covid wasn’t the first and won’t be the last disease that can cause deaths on a large scale. Should there be compulsory ex gratia for all widespread disease-related deaths? Covid was declared a disaster. What about a massive outbreak of another disease? How will states, or even the Centre, fund such compensation when there are so many other calls on the public purse? Perhaps, governments will take this SC order as an incentive for improving public health and therefore lowering payouts. Or, given this is the Indian state, perhaps not.