Lockdown exit norms, labour policy changes needed

Sushma Ramachandran

Senior Financial Journalist

Sushma Ramachandran
Senior Financial Journalist

Even as the country gears up for another three weeks of lockdown, it must be recognised that the exit process over the next few months is going to be long, gradual and painful. Not just for India, but for the entire world. Life as we know it is going to change radically, at least for the next year or so, till a vaccine is created for the Covid-19 virus.

Till then, the concept of social distancing and safe hygienic practices like regular handwashing will have to continue to being practised by everyone. Even after the pandemic peaks in any country, the return to normality is fraught with concerns over re-infection, as witnessed in the Wuhan area of China. The idea of wearing a mask on a regular basis may become a societal norm in the coming days, as it is in some countries like Japan. In other words, bringing the economy back on track will have to be done in a systematic, careful and safe manner, in order to ensure that the interests of health and economic well-being are both kept in mind.

The plans now being envisaged by the government are to allow activities in agriculture, rural-based and export industries as well as cargo movement. The priorities are in the right direction but the problem lies in implementation. This was the case with the lockdown initially as well where the rules appeared adequate but lack of clarity led to the unintended effect of a complete disruption in the supply chain of critical goods. Bureaucracy tends to be opaque and non-specific as this promotes red tape in government systems. In this case, the decision to allow “essential” and curtail “non-essential” items’ movement became the excuse for the police and regulatory authorities to clamp down on all transport in the country. Instead of specifying that all food and medical products should be allowed to move freely, the vague terminology of “essential supplies” was used which effectively stopped transport of all goods. After all, who decides what is essential — is it officials at barriers and checkposts? And they take the normal route in case of ambiguity — when in doubt, say no.

So, the first priority has to be to ensure clarity in rules for the partial lifting of lockdown after April 20. The new guidelines issued by the Home Ministry are certainly far more specific than previously. Hopefully, this will ensure that the supply chain is not disrupted and that the millions of self-employed are able to regain their livelihoods.The clear-cut policy guidelines in key areas of industry and agriculture are indeed timely as economic growth is set to fall precipitously over the next year. The International Monetary Fund has predicted that growth in India will fall to 1.9 per cent during 2020-21 as against the global growth decline of 3.1 per cent. The World Bank has also pegged growth for the current fiscal at between 1.5 to 2.8 per cent, as against earlier projections of 4.8 to 5 for the 2019-20 fiscal. These predictions may show growth collapsing but actually appear optimistic, given the expectations that there will be negative growth in this country for at least two months from the beginning of the lockdown on March 23.

The second area that needs to be dealt with is the simultaneous rise in unemployment. Latest estimates by the Centre for Monitoring Indian Economy are that the unemployment rate was over 20 per cent in the week ending April 5. In this scenario, the government will have to step in to provide support to marginalised sections. The visuals of the long marches being made by migrant workers all over the country after the lockdown commenced have shown only too clearly that these are the real drivers of the rural and the urban economy.

At this point of time, there is a shortage of labour in the rural areas to undertake harvesting right now and for kharif sowing by next month. Similarly, workers are needed urgently in the urban areas to restart factories, small businesses, construction activitivies and goods transport. So, the government needs to focus on providing some form of employment guarantee to these workers. Labour laws must be strengthened to ensure that this segment cannot be retrenched without any valid reason. There should also be a minimum wage support system as there is in many other countries so that the state is responsible for ensuring that salaries continue to be paid to the workers in exigent circumstances.

Thirdly, the government needs to rapidly provide emergency support to those who are facing the most distress from the lockdown. The Rs 1.7 lakh crore financial package already announced by the government has some positive features, but it does not address the livelihood issues that are plaguing the economy. Several elements are commendable, including direct transfers under the PM-Kisan scheme, collateral free loans for women self-help groups, 5 kilograms of free foodgrain, and funds transfer to women with Jan Dhan accounts. On the last one, it was not a time for the government to be displaying its positive gender bias as lakhs of men with such accounts are also in dire straits.

But this package is not enough at this time. A bigger stimulus plan is needed with the focus being on the unorganised sector workers who are facing the brunt of the crisis. They comprise roughly 90 per cent of the country’s total workforce, a statistic which has been brought home forcefully as all sectors are facing an acute shortage of labour from this till now ignored segment. The government must open its purse strings and meet their immediate requirement of funds by infusion through the Jan Dhan account system. This will provide some relief for the time being.

The pandemic will have a silver lining if policies are finally evolved to provide the largely undocumented migrant workers with a social security net. Any economic revival, which is clearly going to be a long haul, is linked inextricably to the rehabilitation of these workers. Their well-being is critical to both farm and industry processes. It is time for an overhaul of priorities to ensure that those who are the backbone of the economy are given their due.

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