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Home > 2020 > Economic pain digs up in rural india | Tarun Kumar Basu

Mainstream, VOL LVIII No 25, New Delhi, June 6, 2020

Economic pain digs up in rural india | Tarun Kumar Basu

Saturday 6 June 2020

by Tarun Kumar Basu

Economic pain deepens in rural India for massive attack of COVID-19 even though stimulus financial packages announced by the Finance Minister Nirmala Sitharaman and assured free food,fuel and a regular cash transfer for the poor.

But the question arises whether the announcement of programs in press conference by the Finance Minister is sufficient for livelihood of the rural people in the country. The experts say that it depends upon the effectiveness and utilization of the stimulus packages in a more technical and prudent way that is a mammoth task of the government. It will also depend on how quickly the lockdown period is over.

The first visible impact of COVID-19 in the rural sector is on agriculture and its transportation. As our country is agriculture-based, and it chiefly depends upon the nature of monsoon, which is forecasted to be normal this year, so that major parts of stimulus packages should be utilized in agricultural purpose. The Central Bank last month granted three-month moratorium loans. It also initiated short-term crop loans for agriculture. These are the glimmers of hope for the agriculturist of the country. The disruption of fruits and flower markets is a bigger threat than Coronavirus. It is expected that coronavirus outbreak can not affect the output of Indian agriculture and will grow at 3% that may change the complexion of Indian economy. The experts are expecting record food-grain production at almost 300 million tonnes, which includes 149.92 MT Kharif and 148.4 MT Rabi. The government will now have to ensure the picking up the food grains that farmers sell in the market.

Another impact of COVID-19 is the delay in sowing and harvesting of crops in the country. It occurs due to the unavailability of products such as chemicals, seeds, ancillary support, tractors etc. It has been noticed that farmers plucks the fruits from the orchards and flowers from the garden and sell it at throwaway prices due to unavailability of supply chain management, shortage of packaging materials and lockdown orders. Another important impact is the complete shutdown of exports. India has been a major exporter of crops. As per APEDA, India’s overall agricultural exports in 2018-19 were to the tune of Rs 685 billion. At present, due to lockdown, all the ports, both land and sea-ports had seized to work and huge inventory has been conglomerated in different places of the country. The pandemic of Corona virus has put pressure on groundwater resources in all nook and corners of the country. Agriculture is the sector which employs more than half of India’s workforce.

Rural areas will have a repletion of migrant workers who have returned from cities. Hunger and social unrest is real in most of the rural areas in the country. The family members of the migrant labourers are totally dependent on their single-handed income. The present situation is expected to be easier if the food allowance system of the government for the poor is implemented deliberately.

Consumption is one of the bed rocks of the economy of any country that brings revenues and rural sector plays a pivotal role of the pillar of growth. According to a survey by the "People Research on India’s Consumer Economy", New Delhi, nearly 57% of India’s household consumption expenditures come from the rural areas. The government will have to emphasize on this field . Otherwise we can not move a single step and fight with the present situation created by Covid-19.

After agriculture ,art and craft industry is one of the biggest sources of employment in the country. But in our country crafts communities face a plethora of issues that become a headache to the government. There is a problem of shortage of cash in hands. They neither can buy the raw materials nor selling a finished products. It is estimated that more than 130 lakh people in rural and semi-rural areas are involved in art and crafts industry. A tiny amount that announced by the government in packages will not fulfill their demand. Only production will not create money, if there is no buying capacity of the people. There is no chance to fabricate the selling counters which are being installed in time of festivals as there is an uncertainty to celebrate this year colourfully. The fairs, are to be held this time, postponed due to the government guidelines. The disruption of transportation and closure of different wholesale market have ravaged the economy of rural areas. The craftsmen are self -employed and dependent on seasonal retail sales. Exporting of arts and crafts is not possible in near future. The survival of artisans or craftsmen is under questin. The famous handycrafts like ’Madhubani Painting’ of Bihar or ’Baluchari’ of West Bengal will face problems again after demonetization and GST implementation. These artisans don’t have any safety net for their lives. So,the government policy will be to assure the promotion of the products and huge selling for their livelihood. A regular cash flow will help them to survive. Government should look into the looming food crisis and possible hunger deaths.

Now returning of migrant workers from different cities will create a new pressure on rural economy. No state government have a database of migrant workers they can extend helping hands. Government is anxious over a looming unemployment volcano. There is one legislation,’Inter -State Migrant Workers Act,1979’,is not sufficient to saveguard them. The Central government has intimated by announcing a relief package for the people related to farming . Government had announced Rs 2,000 to farmers in the first week of April under existing PM Kishan Yojana. They have reduced the burden of loans by giving EMI’s for next three months that may give them a breathing space to many in the region. In another landmark announcement, the government has enhanced the daily wages of MGNREGA workers. That will, in the region, benefit approximately 5 crore families across the country. As per published reports, India’s farming market was worth INR 16,587 Billion in 2018 and was extrapolated to reach INR 30,675 Billion by 2024, growing at a CAGR of 10.8% during 2019-2024. The relief packages, announced by the government, will give farmers the necessary support to get back on track.

The annual FMCG consumption in rural areas was around $24 bn and is expected to reach $100 billion by 2025. The road ahead is definitely not a cake-walk for the government, but people are still an optimist and hopeful that India will be able to sort out of this crisis. As the labour laws have not been implemented, how the state government tackle the situation for migrant workers to create new jobs. The state governments already announced that a new master-plan will be framed for them where hundred-days job in rural areas will take a momentous role.

Tarun Kumar Basu is a free-lance journalist.

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