India needs a common minimum relief plan. Here is a road map
Protecting workers in the unorganised sector, farmers, the middle class, and MSMES, is key to securing India’s future
The coronavirus pandemic (Covid-19), and the challenges that it has presented, have made it clear that any comprehensive and eff ective response must be based on the three pillars of prevention, testing and economic fortification. While the first two can be contained through uniform international practices, the third requires a solution that addresses India’s unique and diverse economic terrain. It is for this reason that the Congress has been pushing the Centre to come out with a roadmap that reassures the most vulnerable that their concerns are paramount.
In this piece, we provide the government with a ready catalogue for those at risk. These are the key stakeholders in the development, publication and execution of, what we call, a “Common Minimum Relief Programme”.
Those at the bottom must be at the top in the order of priority. This includes daily-wage earners, labourers and migrant workers. The last few weeks have attested to the fact that they are the most affected in terms of economic and social insecurity. We have witnessed the scale of economic upheaval and displacement, with millions of migrants trudging across states to get home. There is no longer any alternative, but to prepare a targeted social security programme for these individuals and their families.
These concerns were brought out by eight major national trade unions in a letter to the central government last week. Their suggestions provide an insight into the real cost paid by these workers who face evictions, food shortages and lack of access to basic facilities. The government must use these recommendations as a template to identify key areas to tackle. This must be done on a war-footing, given that the overwhelming majority of our population is currently employed and engaged in the unorganised sector.
This brings us to India’s “annadatas” ( food providers). Sixty per cent of India is engaged and occupied, in some form or the other, with the agricultural sector. For farmers, this year has had a greater-than-normal set of challenges. First, they were impeded by unseasonal rains and inclement weather. Now, given the absence of agricultural labour and transportation facilities, how can they harvest the standing crop? Make no mistake, a shortage of wheat and other rabi crops will have adverse consequences for every citizen. Clarity, information and guarantees must be provided by the Centre on procurement and prices.
The next in this sequence, and right in the eye of the storm, is the middle class. The longer economic activity remains dormant, the greater the erosion of the middle class.
Employers in the private sector have begun slashing salaries, and will continue to do so. Large numbers of mid-level and blue-collar jobs have been lost. Every single index suggests that this trend will intensify in the near future.
The government’s response has been to offer delayed payment of EMIS, disingenuously enough, without interest subvention. This, in turn, leads to a greater cost in the longrun. At the same time, it has lowered the rate of interest on all small savings schemes. This has directly hit senior citizens, pensioners, farmers and women especially hard. This is a catch-22 situation in which the cost of the obligations go up in the long-term, while the value of the savings goes down sharply. How is this in the interest of the middle class, which is already seeing its savings ravaged by the high cost of petrol, diesel and gas? These are the same people who gave up their subsidies when Prime Minister Narendra Modi asked, without a second thought or hesitation. It is now time for the government to reciprocate and secure their interest.
Not so long ago, medium and small-scale enterprises (MSMES) were recognised by the government as the “backbone of the economy”. This is a fact, given that MSMES contribute close to 30% (~61 lakh crore) to the GDP. The same government is yet to provide a plan that bails out these 42.5 million entities that employ several times as many citizens. Unless there is a plan for protection, followed by a strategy for revival and growth, this sector will be irreparably diminished. This will devastate the spirit of entrepreneurs, who, in the words of the prime minister, are the growth ambassadors of the economy. Governments and the people that elect them are judged by their response to crises and catastrophes. Indians have demonstrated unshakeable resolve, patience, optimism and fortitude in dealing with the Covid-19 pandemic. For the Modi government, the litmus test starts now.