Life, Livelihood and Lock Down: The Dilemma Ahead

by Manish Sharma

Introduction

The most pressing question before the nation is how to combat the existing pandemic coronavirus with minimum possible damage to the Indian economy. COVID-19 has created not just an emergency situation for health but for the economic health of the country as well. At present, the health of the Indian economy depends on the answers to the questions: how long the lock-down (complete or partial) would last in India? What would be the nature of restricted lockdown? What fiscal and monetary policies are going to be adopted by India? And, what would be the responses of common people to the given advisories of the Government? How can the loss to the informal economy be recovered? At this stage, we may anticipate that a longer lockdown would cause even more havoc to employment, economy and livelihood, hence we have to find some viable alternatives  to sustain our economy with minimum damages. And same is the dilemma for the Government, whether to save lives or livelihood with the only tool lockdown as no other treatment is available, at least in the short run.

The present lockdown period of 40 days (till 3rd May 2020) due to COVID -19 in India is nearing to an end, and discussions are hovering round for its further extension in some sectors of the economy. Now it is explicable that the Government’s stance is changed regarding lockdown from total lockdown to restricted lockdown. As per discussion of Prime Minister of India with the state Chief Ministers on April 27th , 2020 ,it is clear that country will have to give importance to economy as well as to continue the fight against coronavirus with a common consensus of strict restrictions to COVID-19 hotspots or red zone (A district/region with highest case load contributing to more than 80% cases of each state or a district with doubling rate less than 4 days), while curbs can be eased gradually in areas which are in green zone(A district/region which has not reported any case over 28d days). “However, some states preferred to maintain strict restrictions for fear of losing control, with Tamil Nadu and Karnataka joining Delhi in deciding against any relaxation till 3rd May, 2020.†[1]

For the first time when Government imposed a nationwide lockdown from 25 March 2020, the Prime Minister of India implored the people to prioritize the life by saying “Jaan hai to Jahan Hai†(only if there is life there will be livelihood), but he said on 11th April, “Jaan bhi Jahan Bhi†(Means of subsistence are equally important as life) reflecting his priority to open the economy with restrictions after lockdown period. The Government understands that the country’s 1.3 billion people are prohibited from leaving their homes, all non-essential businesses have been closed and almost all public gatherings are banned, impacting the economy heavily. Economists like Kaushik Basu and Arun Kumar have also echoed apprehensions that “failure to provide essential goods and services to the bottom 50 percent of the population could bring India to the brink of mass sufferings and social revolts†[2].

Informal Sector of Indian Economy

Indian informal sector comprises of workers earning as a small shopkeeper, a small enterprise, a street entrepreneur, domestic helper, a contract worker, a daily wage earner (skilled or unskilled) and so on. According to an ILO report, “close to 81% of all employed persons in India make a living by working in the informal sector, with only 6.5% in the formal sector and 0.8% in the household sector†[3].And as per Periodic Labour Force Survey (PLFS) report 2017-18, “around 45 crore (47 %) adults were working in the country. Over half (52 %) of the workers were self-employed followed by casual workers (25 %) and the remaining were regular or salaried (23 %)†[4].From these figure it is evident that more than 75 % of working population comes under the informal sector.

Lock down and it’s Implication on Informal Sector

As most of the informal sector workers, earn and spend money on daily basis with limited saving, their life has become miserable after lockdown, as neither they have current source of income nor do they know their future. These daily-wage labourers are finding it arduous to survive without any work or wage supplemented by social protection and rights. To state it here, “In India more than 90% of the country’s workforce is estimated to be from the informal sector. The Economic Survey of 2017-2018 had reported that 87% of the firms in the country, representing 21% of the total turnover, are operating informally and completely outside the tax and social security nets.†[5] signifies the vital and crucial situation of this sector of the economy, which is the worst hit by lockdowns.

However, the post corona labour statistics for March 2020 are worrisome “till first week of April, 2020, 12 crore Indians have lost employment due to economic shut down and 8 crore of them are the main or the only earner of their family†[6]. So, one-third of the country’s 25 crore households are facing a livelihood crisis at present. While “ HYPERLINK "https://en.wikipedia.org/wiki/Indian_economy" \o "Indian economy"Indian economy is expected to lose over 32,000 HYPERLINK "https://en.wikipedia.org/wiki/Crore" \o "Crore"crore (US$4.5 billion) every day during the first HYPERLINK "https://en.wikipedia.org/wiki/2020_coronavirus_lockdown_in_India" \o "2020 coronavirus lockdown in India"21-days of complete lockdown† HYPERLINK "https://en.wikipedia.org/wiki/Economic_impact_of_the_2019%E2%80%9320_coronavirus_pandemic_in_India" \l "cite_note-:23-4"[7]HYPERLINK "https://en.wikipedia.org/wiki/Economic_impact_of_the_2019%E2%80%9320_coronavirus_pandemic_in_India" \l "cite_note-:24-5"[8], and perceptibly it will be manifold in case of its extension for another 19 days. In another study, International Labour Organisation (ILO) reported that “outbreak of corona virus has the potential to push around 40 crore informal sector workers, including casual workers, regular or salaried workers and sole self-employed (own account or unpaid family) of India without any job security resulting the spread of poverty across the country†[9].All these figures and facts increased the Government’s dilemma; whether to save lives or livelihood in coming months.

Post Lockdown 2.0 Situation

The Government of India on 14th April, 2020 announced that after extensive scrutiny from 20 April, a conditional withdrawal of the lockdown will be permitted in the areas where the spread has either been contained or prevented, for safe operation of essential businesses and supply chains. The Prime Minister of India appealed the people to work from home, though this is not a feasible option for the socio-economically disadvantaged people who rely more on physical labour and location-based services for their income. He also called upon the state Governments to involve and make strategies to maintain the supply chain- in door to door distribution of essential commodities like medicines, milk, vegetable and grocery, giving a ray of hope for fast recovery and survival of the economy.

It is expected that if lockdown continues at least up to 3rd May ,2020, Indian economy may loss up to tune of Rs 17.78 lakh crore giving shocks not only to informal economy but formal sector economy too. “Several sectors such as manufacturing, travel and tourism, aviations, film and entertainment, real estate, automobile industries are likely to be effected more in comparison to other†[10]. So partial opening of selective sectors outside of Coronavirus hotspots from April 20 has limited hopes to save the sinking economy.

Moreover, the move of the Centre “to allow manufacturing across Special Economic Zones, Export Oriented Units and units operating from rural areas is being seen as part of the strategy for a gradual exit from the lockdown. The home ministry order has also allowed manufacture of IT hardware and essential goods among a slew of other activities. While many companies engaged in manufacturing are exploring the possibility of opening their factories, they are discussing the plan with other players in the supply chain; however, options are very limited†[11], but hopes are high. Despite ,it seems that manufacturing sector will be the hardest hit sector among the above stated sectors as “opening up manufacturing at a time when demand in most sectors has crashed between 50-90% would have been suicidal. Confederation of Indian Industries (CII) said that existing export orders and opportunities should be met to retain India’s export market share in the post-COVID period†[11].Even agriculture sector experts are skeptical on the post corona situation as this sector is facing a huge loss to the farmers and agricultural labour (migrant and non migrant both) in terms of income and wage. In fact, the post lockdown situation is rather bleak than rosy in almost all the sectors of economy, as new cases of asymptomatic cases are emerging which may force the Government to extend lockdown, at least the movement of people may be restricted in hotspot zones, mounting the miseries of poor people.

Course of Action So Far 

It is important to note that marginalised and disadvantaged sections of the society are highly affected by the absence of market activities. It is a matter of appreciation that, several state Governments have appealed the employers to not dismiss or cut the salaries for the employees during this time of calamity but ground reality is still to be tested.

The Prime Minister had already declared additional 150 Billion rupees for health infrastructure, to tackle the COVID-19 pandemic, just after the declaration of lockdown and constituted the COVID-19 Economic Response Task Force, which may recommend additional fiscal and support measures .The Government of India had announced “a sum 1.7 trillion rupees under scheme- Pradhan Mantri Garib Kalyan Yojana (PMGKY), as safety measures to support the vulnerable population and it would cover- 80 crore or 2/3 of India’s population mainly belongs to informal sector†[12]. Nevertheless it seems, it is not sufficient, and the most pertinent question is will this group survive on such assistance? Besides that, financial relief packages have also been announced by the different states as a relief to the daily wage earners and labourers. But given the threat and reality of burden it seems that we are trying to pull the bull by horn.

The Tasks Ahead

India is witnessing disruptions in backward and forward linkages in supply chains. Important sectors of economy in terms of employment, such as manufacturing, construction, tourism and hospitality, real estate, film and entertainment and retail industries, are facing losses beyond imagination as endogenous and exogenous variables are functioning, and it is not easy to estimate the economic loss due to this outbreak at current situation. However, estimates show that “India may be losing close to Rs 40,000 crore daily due to the national lockdown†[13]. “The loss of Rs 10,000 crore in taxes for every day of the lockdown comes at a time when the Government’s historically small spending on HYPERLINK "https://www.business-standard.com/topic/health" \t "_blank"health infrastructure has to rise to combat the pandemic, and emergency bailouts need to be financed†[14], makes the task of Government rather pugnacious.

Many informal and formal micro and small businesses enterprisers along with self-employed workers have lost their incomes because they are locked in their homes and/or have seen their demands have been dried up.Hence to revive from this sitution, an urgent relief package to the marginalised people /informal sector workers is needed with detailed guidelines. The intention of the state Governments and cental Government with limited resources to contain the pandemic is remarkable, in comparison to other affected countries. But at the same time, it  is  imperative that the respective Governments are to increase the number of testing laboratories and quarentine centers and expand other health services for immediate relief measures to the affected patients. On the other hand,it is equally important to start planning at the macro as well as micro level to deal with the economic fallout and rebuild a more inclusive economy in a post-COVID-19 world. Much of this hinges on revival of labour markets and livelihoods.

As HYPERLINK "https://www.businessinsider.in/finance/news/raghuram-rajan-says-save-people-before-saving-the-economy/articleshow/74792120.cms?fbclid=IwAR3ncx1ji3BWuS-zaGQom1lrQGrnS0jejIrBUSonfW-ry_8HuVrOCUoNNio" \t "_blank"Raghuram Rajan, former Governor of Reserve Bank of India, has rightly suggested, “lives of people should be placed before the economy and urgent focus should be on testing, tracing, treating, and controlling the pandemic. For this, the entire budget for FY (fiscal year) 2020-21 can be re-prioritized along with a reorientation of Government machinery (its departments and private consultants leading project monitoring units), and optimum utilisation of all resources in the country.†[15]In this economic crisis, fiscal reforms are of utmost importance. Industries and  businesses need funding to tide over the crisis. Beside that,the Government must reduce the tax compliance burden and enabling universal access to social safety nets, including healthcare, maternity, disability and pension benefits for all workers to get rid of the situation smoothly.“Notwithstanding the challenges of economic shocks, the Government must take proactive steps to manage as well as mitigate the risk of contagion in India.Proper and resposible response of the society is also is a exigent need of the hour. As Medical data changes hourly, consequent upon these changes, the strategies adopted by the different agencies to control this epidemic are to be modified accordingly†[10]. 

Some Exemplary Learning

Kerala has shown remarkable path to combat COVID-19 at a time when the total number of COVID-19 cases in the country has crossed 29,974 and deaths from the disease have hit the 937 mark. Kerala’s tally is 469 cases and just four deaths as on 28th April 2020. It is truly commendable under the given situation. An exemplary action of Kerala model is of Community Kitchen, which is providing free cooked food to the people at the grass root level to fight the hunger during the lockdown period. Kerala Government has “delivered cooked foods to the needy even at their doorsteps free of cost by setting up community kitchens at all the 941 Panchayats in the state in view of the lockdown†[16]

On the other hand, Odisha has proved itself and managed to contain the COVID positive cases with limited medical infrastructure. It is not that the state is not doing enough tests for which only a few cases have been detected. More than 1000 tests are being done daily in a number of test centres across the state. And still the total number of positive case is 108 out of which 01 has died as on 28th April 2020. This state has initiated some well managed micro level practices such as starting dedicated COVID hospitals run by professional hospitals and  Government COVID hospitals in all its districts. Odisha Chief Minister Naveen Patnaik  said, “The 14-day quarantine is very important to protect the returnees and their families. To implement this effectively, the State Government delegates powers of District Collectors to sarpanches of Gram Panchayats for their jurisdiction under Section 51 of Disaster Management Act, 2005, Epidemic Diseases Act 1897 read with Odisha COVID-19 Regulations, 2020".[17]. The Odisha model of  delegation of power of the district collectors to the Sarpanches at the grass root level may be emulated by other states to fight the pandemic in more effective and transparent manner. Considering the efficacy of both Odisha and Kerala models, it is appropriate to apply these models in other states in  the relevant sectors.

Conclusion

Concluding the discussion here, we can say that the dilemma of Life, Livelihood and Lockdown (3L) at this moment is really a pressing issue before all of us. No doubt, there is need for a balancing act between the three 3 L to secure human existence, income and economy. Unquestionably, the relaxation of restrictions in green zones will stimulate and rebuild the economy, in reference to the rural economy in general and agro -based economy in particular. On the other, the problems of agricultural and urban migrant labourers are to be addressed through a slew of state sponsored welfare schemes, and more specifically the rural development architecture is to be shaped in the philosophy of PURA (Providing Urban Amenities to Rural Areas) in the long run perspective to create self reliant society to  stave off the post corona economic hazards. We also need ponder over issues on reverse migration, urban congestion and corona like pandemics, and work more resolutely to bring in effective urban development policy, health and disaster management strategy to fight the impending menace .

Acknowledgement The Author acknowledges Dr. J.K. Pattnaik, Head, Department of Political Science, JTGMDC, Roing, Arunachal Pradesh for the valuable inputs on earlier version of the draft.

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Manish Sharma is Professor, Department of Economics, Institute for Excellence in Higher Education (IEHE), Bhopal, an autonomous institution under the aegis of the Government of Madhya Pradesh