The Government, especially the Prime Minister is, like earlier decision on demonetisation, is no mood to accept the responsibility of an unplanned decision, but the impact of the decision and its overall effect on the national economy as also the livelihood of the people, are too apparent to be ignored. So now two days before the expiry this month end, the Home Minister Amit Shah began consultations with the Chief Ministers to elicit their views on the lockdown extension or if withdrawn how to deal with the post lockdown situation. The move is to pass on the buck on the states if the decision does not give the desired result.
It is very difficult now to come out of the mess created by the Modi government itself. The BJP government did not consult with the real health experts and opposition parties about the nation's strategy both short term and long term to deal with the covid crisis. The lockdown just gives some time for the official agencies to get prepared to fight the disease and there has to be a perfect balance between the requirements of lives and livelihoods. Both are equally important and both have to be looked after as the first is interlinked with the other. The corona cases are surging even after lockdown 4 and the latest on May 28 shows a figure of nearly 7500, the highest daily rise till now. Experts have predicted that June will be critical month and the virus will continue to engulf more and more areas.
At the other end, the livelihoods of the workers and staff of private companies and the trade, are in a perilous state. Without the lifting of lockdown and resumption of normal industrial activities including construction, the number of jobless will go on increasing. Even a calibrated opening of the industrial activities may not show desired results as many MSME units will not start activities since they are not sure of demand for their products picking up.44 per cent MSME units said in a survey that the stimulus so far announced by the Government is inadequate to pep up demand. If they can sell their products, why they will go to the banks for loans and overburden themselves with debts. Simultaneously, a survey by the Centre for Monitoring of Indian Economy hs revealed that as on May 24 this year, the number of unemployed was 24.3 per cent and this percentage will go up if the lockdown is not lifted.
The week ended May 24 recorded an unemployment rate of 24.3 per cent. This is a shade higher than the 24.0 per cent unemployment rate recorded in the preceding week. It is also a tad higher than the average unemployment rate of 24.2 per cent seen in the past eight weeks — those of the lockdown. The unemployment rate therefore continues to remain very high at over 24 per cent during the lockdown.
According to the CMIE survey, the labour participation rate (LPR) was 38.7 per cent in the week ended May 24. This was lower than the 38.8 per cent recorded in the preceding week. This fall in the labour participation rate comes after three weeks of continuous increases. While the unemployment rate has been reasonably stable around 24 per cent during the lockdown, the labour participation rate trend seems to tell a story of some interesting changes in the labour markets. The unemployment rate has risen from 8.8 per cent in March to 23.5 per cent in April and seems to have remained stable at the elevated rate of around 24 per cent in May.
The weekly estimates of May seem to suggest that there is a migration of labour from the “willing but not looking for jobs” category to the “willing and looking for jobs category”. The discouraged workers seem to be coming back to look for jobs. This is good news. Interestingly, the weekly data also suggests that this influx into the labour markets is succeeding in finding jobs. The evidence to this is in the stable unemployment rate even in the face of a rising labour participation rate.
A stable unemployment rate and a rising labour participation rate imply an increase in the employment rate. This has indeed increased from an average of 27 per cent through most of April to 29 per cent through most of May. This two percentage point increase implies that about 20 million people may have been added to the count of those who are employed. Implicitly, the loss of 122 million in April may have narrowed down to 102 million in May.
(IPA Service)
MODI GOVERNMENT'S DILEMMA ON LOCKDOWN EXTENSION MOUNTS
CONTINUING SURGE OF CORONA CASES MAKING DECISION DIFFICULT
Satyaki Chakraborty - 2020-05-29 09:20
The Narendra Modi Government completes its first year of second term on May 30 and at the same time, the Prime Minister is saddled with a decision on to extend or not to extend the present lockdown of the nation which began on March 25 this year The lockdown 4 expires its term on May 31. The first lockdown decision was unilateral as Prime Minister announced his decision only four hours before the beginning of the lockdown thereby plunging the nation in an unprecedented crisis as all the industrial and construction activities stopped leading to extreme plight of the million of migrant labour throughout India.