Covid-19: Some decisive steps to revive economic activity, but challenges on ground
The
Indian Express
Pranav Mukul , Aanchal
Magazine , Prabha Raghavan
Dated April 16,2020
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.
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.
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.”
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.
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.
“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.
“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.
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