Mr. Riko Mahato(rkmht)

Friday, May 1, 2020

Announce the stimulus, nowIt must be geared towards all businesses

Om namo shivai

It has been 37 days of the national lockdown. Besides the first announcement — on March 27 — of a ₹1.7 lakh crore package to provide what were rather minimal relief measures to the poor, the Centre has not yet come up with a package for the economy. Prime Minister Narendra Modi, in one of his first speeches to the nation on the coronavirus pandemic, spoke of the creation of a high-level economic task force to suggest measures, but little has been heard of it since. There are indications that the government is working on a stimulus. Besides the fact that this is already delayed, reports suggest that this is broadly focused on the micro, small and medium enterprises (MSMEs).

There can be no doubt that MSMEs have been severely affected due to the lockdown. They have little financial cushion; they employ the majority of India’s workforce; and they need urgent help. But it will be a mistake if the government just focuses on them, and ignores the demands of larger industry bodies that have sought a more comprehensive package. Given India’s socialist past, there is a tendency to look at bigger businesses with suspicion. But as the decades after economic reforms have shown, these businesses are critical. They provide mass employment, both in manufacturing and services; they are at the forefront of innovation; they can embark on larger projects that are critical for infrastructure needs; and their contribution to the revenue basket is key to fiscal health.

The lockdown has affected every sector, small and big. Given the complex supply interlinkages that exist among all segments of the economy, helping one part — while neglecting another — will not be enough. The expected collapse in demand will also affect all industries. That is why it is crucial that when the government announces its package, it must take into account all industrial activity. Announce the stimulus now, with an eye on all the moving parts of the economy.

One nation, one ration card

Om namo shivai

The Supreme Court (SC), on Tuesday, asked the Union government to examine the feasibility of implementing the “one nation one ration card” (ONORC) scheme during the national lockdown. The scheme, which allows beneficiaries to access food grains that they are entitled to under the National Food Security Act, 2013, from any fair-price shop in the country, was announced last June.

The SC’s nudge to expedite the ONORC is critical. Millions of out-of-work migrant workers are stuck in host cities due to the lockdown. Many have run out of money to buy food and don’t have a proof of identity like ration cards to access subsidised food grains via the well-stocked public distribution system (PDS). States where they are stuck prefer offering relief to their own residents first, and cite the lack of identity documents to deny benefits. And among those states which have opened community kitchens for out-of-job migrant workers, there have been complaints of the quantity, quality and type of food. Some feel that the ONORC scheme will not be of much help during the present crisis since many migrant workers have left their PDS cards in their villages. Instead, the Union government must expand the PDS system to cover all individuals, irrespective of whether they have a ration card or not, for at least six months.

While this must be done, the government must also fast-track the ONORC scheme because India’s present rights-based regime is based on the assumption that people are sedentary. This is not true given the high rates of inter- and intra-state migration. Without any safety net, migrants depend either on their employers or labour contractors for food provisions or purchase food in the open market. This increases their cost of living and reduces the additional earnings they might hope to remit to their families. During the lockdown, the crisis has become even more acute. But even after the coronavirus pandemic is over, this will be useful. Migration is bound to restart because of unemployment. When migrant workers again start boarding trains and buses for the destination cities, they must have their PDS cards that are valid across India with them.

Om namo shivai