A couple of days ago I had a conversation with an e-rickshaw puller. It was late at night and we were near a metro station, so assuming I had come from there he stopped and asked me if there were any commuters taking the train. I told him there were very few. He said he’d heard the number of daily travellers was down by half, and it had become very hard for him to get passengers. After deducting expenses, he had earned only 50 rupees that day.
“If the Covid-19 pandemic becomes prolonged,” he said, “it will be near impossible for me to make ends meet.” When I explained the possible effects of Covid-19 and asked why he doesn’t quarantine himself given how he comes in contact with hundreds of people every day, he said that as a daily wage earner, if he doesn’t go out and earn he and his family will have to starve that day.
He said it was death for them either way, from the coronavirus or starvation, and at least this way his family wouldn’t starve.
There are millions of such daily wage earners and blue collar workers who will ultimately starve if they cannot get out and earn a living. While the rich and maybe the middle class can afford the luxury of working from home, it’s the wage earners and manual labourers who will be exposed to the risk of Covid-19 on a regular basis.
And this is the impact on just one section of the population. The pandemic has already had a huge impact on the national and world economy and the effects are starting to show. The aviation sector is currently the worst hit. Some airlines have already announced pay cuts for their employees, and if the situation persists there might even be large-scale job cuts in the sector. Other sectors such as tourism, hospitality and trade are also facing the heat.
Similarly, the manufacturing sector especially MSMEs will also be deeply affected if the lockdown due to Covid-19 lasts for long, because while white-collar jobs can be done sitting at home the same is not possible for the manufacturing sector. And once the manufacturing stops, they will be forced to lay off employees or at cut their pay.
These Micro, Small and Medium Enterprises contribute around a third of India’s GDP employing around 11 million people, and any impact on them will directly impact the recovery of India’s already reeling economy.
The problem doesn’t stop there. The sectors worst hit by the virus (trade, transport, tourism, MSMEs) owe a whopping 11.8 lakh crores to banks in debts. The condition of the banks is not hidden from anyone and with the current proportion of NPAs at 9.1% the situation is already quite alarming.
Global stock markets have already crashed, their worst ever since 2008 economic crisis, crude oil prices are at their lowest in decades on the back of oversupply and crashing demand, and there is the biggest factory shutdown ever across China, Europe and the US. In short, the we are staring at another global recession this year.
The most direct impact of it, the layoffs and pay cuts, have already started to show, and the unemployment rate is expected to rise in the near future.
To come now to the government of India’s response.
India till now has tested only about 14,000 people at the time of writing, conducting around 90 tests per day in a society of 1.3 billion. Government authorities are taking weeks to approve private companies’ tests. This is highly problematic, as in a densely populated country like India the chances of the virus spreading amongst the masses is higher.
In a situation where the World Health Organisation has urged its member nations to test, test and test, the government’s reason for not testing enough might be their assumption that there are no signs of community transmission of the disease, and they want to prevent indiscriminate testing to contain panic. But why wait till there is a community transmission?
So far the testing has reportedly focused on people with foreign contacts, although even in early March the WHO’s situation reports were classifying India as having local transmission of Covid-19.
We are all aware that the quality of our healthcare system is not the best, with the situation in rural and suburban areas being worse. Our hospitals are understaffed and lack basic amenities, so in case there is a sudden spike in the number of cases, our current medical infrastructure might not be able to deal with it.
There is no plan of action yet from the central government on tackling the economic impact of Covid-19 in terms of loss of employment, assistance to daily wage earners to enable them to stay in quarantine, and support for the manufacturing, aviation, trade and hospitality sector to cope with the crisis.
Many other governments have announced financial aid packages to improve healthcare provision and to provide financial reliefs and subsidies for people and businesses hit by the lockdown.
Even state governments have done so, like Kerala’s which announced a ₹20,000 crore relief package covering improvements to the state’s public health infrastructure, consumer loans, welfare and social security pensions, free foodgrain, subsidised meals etc. Delhi announced free rations and ₹4,000-5,000 pension to the poor.
Likewise, the Madras High Court on March 20 had ordered the government to provide food and shelter to poor people during the “janta curfew” urged by the prime minister.
The central government, however, has announced no such relief package expect a loose mention of a Covid-19 Economic Response Task Force, whose goal or mandate or composition are yet to be revealed.
We should remember that the measures adopted by most of the states – lockdowns, border closures, public transport shutdowns, etc – will impact the poor and daily wagers the most.
While Prime Minister Modi delivered quite a thought provoking speech, asking people to self-isolate, not cut the wages of domestic help who don’t come to work, the janta curfew etc, he was basically telling people what they should do to fight the pandemic, while completely ignoring his government’s own responsibility.
He failed to mention what steps the government has taken so far, and what it plans to do next.
He should have shed some light on how the government is tackling this pandemic. What measures has the central government taken so far? Has it ensured that our healthcare facilities are technologically and logistically equipped to fight Covid-19?
Instead of asking people what to do while remaining completely silent on the government’s measures to tackle the pandemic, the prime minister should instead introduce a relief and rehabilitation package for MSMEs and the manufacturing sector, for industries hit by Covid-19, for daily wage earners and people who might face lay-offs and pay cuts.
And perhaps a more comprehensive address, preferably on the government of India’s response to the pandemic, would have been more comforting to citizens.
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