Migrant labour who lived in various parts of the country are in real trouble. They have lost their source of livelihood. Most of them are day-labourers and are devoid of all sources of income. They didn’t know how to survive in the cities where they lived. They decided to opt for return migration to the villages.
It is necessary to provide food and income to these poor families. The government has over the years accumulated massive stocks of foodgrains in the FCI godowns. This is the time to release the accumulated stock of foodgrains and distribute it among the poor. There is no better way than to de-stock the stock pile of foodgrains and use it for the benefit for the poor and needy. Food is required by all and there is no need to ensure that it reaches only to the ration card or aadhaar card holders. Many of the most vulnerable may not be having either ration cards or identity cards.
Migrant labour who live in the cities will have no source of income to pay rent. This is one reason why so many of them decided to return to their villages. Today, I read in the news that the Gurugram administration has asked landlords not to collect one month’s rent. This will be a humanitarian gesture coming at the most appropriate time.
Take the case of a small shopkeeper who does business in a city. His shop will now be closed down. He will have no source of income for a month or two. He will find it difficult to pay salary to his employees. Owners of many small restaurants will fall into this category. It would be good if employees of such shops are distributed cash by the government. There is no need to check their place of residence or their aadhaar cards.
It is welcome that women will be credited Rs 500 into their Jandhan account for three months. It would be desirable if this amount is increased from Rs 500 to Rs 1000 or if the payment is made fortnightly for three months.
The tourism sector has been badly affected. With shut down of train and flight services, tourist traffic has been brought to a halt. Tourist guides will be without employment for some time. Hotels which depend on tourist traffic will have no customers. Business ventures which provide transport support to the tourism sector will also be facing a shutdown.
Airlines all over the world are going through a period of crisis. With business coming to a standstill many airlines will have to close down if the government doesn’t come forward with a package to support the sector. The government should take special care of the transport and tourism sectors if business in these sectors are to survive.
If there is a shutdown in industry the industries will not be able to repay loans they have taken from banks. This will lead to a mounting of non-performing assets in the banking system. Indian banks are already in bad shape. Many of them will face a threat of closure if the government and the RBI does not come to their rescue.
Lockdown helps the health sector to fight the pandemic brought about by the corona virus. But it will also deliver a severe blow to the economy. While some lives can be saved by introducing a shutdown, lives can also be lost due to hunger and starvation brought about by close down of business establishments.
The government should loosen its purse strings and provide liberal financial support to the people. It should not be over concerned about the fiscal deficit and inflation is not going to be a threat in the immediate future. The central government should provide liberal support to the state governments as the actual spending programmes will be undertaken by the state governments.
This is the time for out of the box thinking. The crisis is of an unprecedented nature. Solutions will also have to be of an unconventional nature. The entire world has to come together to fight the pandemic.
P V Rajeev , former Economic Adviser of Government of India and worked as an Economist in Government of India for more than three decades. ...
