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Covid-19: Some decisive steps to revive economic activity, but challenges on ground

Additionally, continued restrictions on hotspots across 170 districts, including those with substantial manufacturing presence such as pockets in Delhi-NCR, Mumbai, Pune, Chennai, etc would translate into slower-than-anticipated ramping-up of industrial activity.

Written by Pranav Mukul , Aanchal Magazine , Prabha Raghavan | New Delhi | Updated: April 16, 2020 8:36:59 am
indian economy coronavirus, coronavirus india economy, covid-19 coronavirus it sector, indian economy coronavirus, coronavirus india economy, covid-19 coronavirus restaurants, While the central government has provide a template of standard operating procedure, it is actually the states that have to implement these to ensure that industries operate without increasing the threat of Covid-19 spread.

Coronavirus (COVID-19): The Centre’s move to restart economic activity across the country from April 20 in a staggered manner expands on guidelines issued earlier to add a number of activities permitted in areas beyond urban areas, and across sectors such as e-commerce operations, self-employed services, special economic zones and IT and IT-related services, but with riders.

However, implementation of most of these guidelines present challenges at the ground level and will depend extensively on the interpretation by individual states, with the issue of migrant workers posing a major challenge, according to a cross-section of industry and state government representatives that The Indian Express contacted after the guidelines were issued.

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Additionally, continued restrictions on hotspots across 170 districts, including those with substantial manufacturing presence such as pockets in Delhi-NCR, Mumbai, Pune, Chennai, etc would translate into slower-than-anticipated ramping-up of industrial activity.

A decisive step, though, is the move involving truckers and ensuring supporting infrastructure such as eateries along highways and repair shops being allowed to open, which is seen to have a positive impact on easing the supply chains bottlenecks and ensuring large-scale employment.

Explained

States have a key role to play

Centre has provided a standard operating procedure, but the implementation lies with the states, which will have their own interpretations. All activities remain conditional upon the state or local administrations ensuring implementation of safety guidelines. Among the concerns will be the issues of migrants and the lack of available labour.

But implementation of most guidelines present challenges. Naushad Forbes, co-chairman, Forbes Marshall, said: “The right approach will be to identify the hotspots at the ward level within districts and have strict containment, restrict people movement and increase testing significantly and push economic activity in the other wards. This approach will be quite effective in both reinstating economic activity and also in containment.”

READ | Coronavirus lockdown: 7 million jobs are on the line, losses piling up, restaurants stare into lockdown abyss

For e-commerce companies, while the scope for operations has been extended beyond essential and grocery items, a condition has been placed that vehicles used by e-commerce operators will be allowed to ply with “necessary permissions”. Similarly, for re-opening of units in special economic zones and export oriented units, industry departments of state governments will have to frame guidelines on the basis of which they will allow these entities to start operations.

While the central government has provide a template of standard operating procedure, it is actually the states that have to implement these to ensure that industries operate without increasing the threat of Covid-19 spread. “Many SEZs and EOUs do not have adequate residential facilities within the units, and practically, these units will have to operate with around 30-40 per cent of their staff capacity,” an industry source said. The central government guideline says for workers coming from outside to work in SEZs and EOUs, the industries should provide special transportation facility with these vehicles working with only 30-40 per cent capacity.

On their part, some state governments have started moving on the Centre’s guidelines. In an official statement, the Uttar Pradesh government noted that conditional work approval will be given to large construction works from April 20. “These construction works include highways, state highways, housing societies, medical colleges, roads etc. Daily wagers will benefit from this conditional approval, but they will have to strictly follow social distancing and other conditions suggested by the government,” it said.

READ | Covid-19: Graded lifting of curbs from April 20; states to decide zones of containment

Notably, the government has allowed operations of brick kilns. Bihar’s Deputy Chief Minister Sushil Modi told The Indian Express that the state had already allowed brick kilns and cement factories to function and has now decided to allow flood protection related work of the irrigation department along with roads and construction activities. “Brick kilns, which are around 6,000 in number, and employ 2-2.5 lakh workers (in the state), resumed work last week. Plan is to operate them as much as possible. Also, work under MNREGA will begin which will benefit workers. There are 35 lakh active cardholders here under MNREGA,” Modi said.

India coronavirus lockdonw, Indian economy coronavirus lockdown, Raghuram Rajan Coronavirus India lockdown, Amartya Sena Coronavirus India lockdown, Abhijeet Banerjee Coronavirus India lockdown, coronavirus latest news update A family of migrant workers walk to their village in rural Maharashtra through the Mumbai-Pune road.

“During the first phase of the lockdown, what was observed was that, while the ministry (MHA) would issue certain directives, the state governments would be waiting on finer details. This would leave out certain products or services that the industry would assume came under the umbrella of ‘essential’ goods and services and there would have to be further back and forth to clarify this,” said a source from industry body Confederation of Indian Industry (CII).

Even companies manufacturing goods considered essential in the previous set of MHA guidelines are “still” facing issues ramping up capacity to meet requirements.

“The realities on ground for the pharmaceuticals industry, which is a priority industry, are still a little different and the directives of the Ministry of Home Affairs are interpreted differently in different states. We have been approached by a lot of our member companies who have said that in spite of the directions this morning, inter-state movement of goods and shortage of manpower is still an issue,” said Pharmaceutical Export Promotion Council of India (PHARMEXCIL) chairman Dinesh Dua.

The industry still faces challenges in enhancing its utilisation of its overall active pharmaceutical ingredient capacity to 50 per cent from 35 per cent currently. Pharmaceutical companies making finished formulations are currently operating at 50 per cent of their capacity and also facing these challenges, he said.

Some in the MSME sector have also raised concerns, saying the exemptions are skewed in favour of larger industries. “All agro processing industry, cement plants, and those factories which require substantially large space — they are all outside municipal limits and in rural areas. So basically, the government has allowed all big industry to operate in that sense. But the MSMEs mostly operate in municipal limits and they do not get much relaxation,” said an industry player, who asked not to be named.

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“The government has done well to open these large industries but it takes care of the challenge of labour as well. Some construction activity will revive with the opening of brick kilns, work under MGNREGA and road construction works, but, by and large, we are staring at destruction of consumption for many months ahead,” he said.

“Allowing carpenters, plumbers etc is not enough, the government must also allow shops related to that such as the hardware shops, electrical shops and service centres,” said K E Raghunathan, a Chennai-based owner of an SME firm, and former National President, All India Manufacturers Organisation.

“It looks like that the 14-day time needs to be used by MSMEs as a pre-operative time. We all walked out of our factory on March 24 and haven’t gone back since then, so these 14 days, for whoever it’s possible, they should go back even if they are not able to do real invoicing, real supplies because the workers may be at different places, transport may not be arranged for them,” he said.

(Inputs from Aashish Aryan, Sunny Verma, Sandeep Singh)

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