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Charting a Common Minimum Relief Programme

Daily wage earners, labourers and migrant workers are at the greatest risk of economic and social insecurity.

Daily wage earners, labourers and migrant workers are at the greatest risk of economic and social insecurity.   | Photo Credit: Arunangsu Roy Chowdhury

The govt. should publish and execute a road map that provides forward guidance and economic clarity to the middle class, medium and small-scale enterprises and above all, to those at the very margins of society

This week, India shall enter the last declared days of the lockdown and start preparations for the resumption, in some form or the other of daily life, that is expected to follow. Unfortunately, the economic pandemic that is likely to succeed COVID-19 threatens to be as large in scale if not larger than the public health crisis that we continue to battle.

It is, therefore, imperative that the government publishes and executes a road map that provides forward guidance and economic clarity to the middle class, medium and small-scale enterprises and above all, to those at the very margins of society.

Also read: Reducing farm distress during a pandemic

While States will come up with varying measures for support and relief, the Centre must lead this effort to ensure uniformity, optimisation and coordination amongst States of varying economic capability. The Congress Party has given multiple suggestions to the government vis-a-vis course correction and guiding measures to take on COVID-19 and the economic crisis that looms on the horizon. In this piece, we elaborate on them in the hope of providing the government with a ready reckoner for those at risk. Let us examine these categories and what are the areas of concern that the government needs to address in what we may call, a Common Minimum Relief Programme.

Economic upheaval, geographic displacement

First, daily wage earners, labourers and migrant workers are at the greatest risk of economic and social insecurity. They face widespread economic upheaval and geographic displacement. The sheer importance of a social security net in helping them tide over this predicted period of unemployment and privation cannot be overstated. Last week, eight National Trade Unions wrote to the Minister for Labour and Employment urging timely action to prevent the inevitable loss of employment and livelihood. Among several other pertinent concerns, they also asked for protections against evictions. Most importantly, they asked for members of the unorganised sector (be they registered or unregistered) to be covered by a robust cash and food distribution system. This concern is extremely legitimate and urgent given that over 80% of the population is currently employed in the unorganised sector. There should be a uniform mechanism for the dispersal of both income support as well as essential items such as rice, wheat, millets, medicines, water and anything else that these families will require.

Farmers left in the lurch

Second, farmers are in dire need of immediate support. Having faced the wrath of unseasonal and inclement weather, the wheat and other Rabi crops are ready for harvesting. But due to the lockdown, the ensuing unavailability of seasonal labour and lack of clarity on procuring arrangements, agencies and prices, the farmer is left in the lurch. Given the vital role agriculture plays both in the economy and in ensuring staples for every single citizen, the resulting crisis is likely to have a widespread negative impact on food security nationwide. Furthermore, and to ensure the problem doesn’t become cyclical, the government needs to make immediate arrangements for ensuring the availability of fertilisers, pesticides, other inputs (including access to lines of credit) for the planting of the next kharif crop as well.

Third, supply chain disruptions for fast moving consumer goods due to unavailability of labour, difficulty in transporting goods across borders during the lockdown is leading to a shortage of foodstuffs and other essential items. This in turn is leading to massive hoarding, black marketing and runaway inflation. This needs to be addressed head on instead of in an ad-hoc manner if mass panic is to be avoided post the lockdown.

Fourth, Medium and Small-Scale Enterprises need a clear buffer strategy for survival. There are currently close to 4.25 crore registered MSMEs which contribute 29% to India’s GDP (or nearly 61 lakh crores) and these have been hit hardest by the COVID-19 crisis imperilling, in turn, the livelihood of crores. Unlike their large-scale corporate counterparts, they cannot survive beyond a period of two or three months at the most. There is no alternative to a meaningful strategy. The government must lay out an action plan, including a financial package, to fortify this sector or risk see it perish.

Protect middle class

Fifth, the middle class is facing growing vulnerability and needs to be protected. We are staring at an inevitable economic crisis and middle class (as a percentage of the population) is likely to be diminished in size unless immediate action is taken. Companies and employers are cuttings salaries and even declaring layoffs to cope with this time. This is aggravated by unjustifiably high petrol, diesel and gas prices. The twin strategy of increased EMI’s (as a result of deferment) and the lowered interest rates on all small savings schemes (as also by the SBI) hitting at the hard earned savings of the elderly, pensioners, professionals and women, have had the exact opposite of a desired impact. To wit, they have reduced the value of savings while simultaneously increasing debt obligations. A long-term plan for economic revival is needed if the middle class is to emerge stronger on the other side of this crisis.

Two suggestions come to mind as obvious solutions: Nyay, the Minimum Income Guarantee Programme was devised for times exactly like these. It will give much needed security — both financial and mental — to those who have no other sources of income due to the lockdown. The Central government must devise and implement this scheme, at least as a temporary measure. The other measure is to strengthen our manufacture and production policies by an extensive financial package with an impetus to and focus on local manufacturing. Every crisis offers opportunities. We have a chance to redraw our manufacturing strategies to reduce dependence on foreign manufacturing, create new jobs and boost exports.

Let us learn from the experiences that we have accrued over the past 20 days and get ahead of the curve on these issues. India has the expertise and the talent to take on and emerge stronger from this challenge.

All we need now, is political will.

(The author is the AICC Media and Communications In-Charge and also an Advocate)

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Printable version | May 30, 2020 5:49:05 PM | https://www.thehindu.com/opinion/op-ed/charting-a-common-minimum-relief-programme/article31268751.ece

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