On the eve of the unlocking one, India saw its highest ever jump in Covid 19 infections and the trend of rising infections may slow down the process of opening the economy if the situation continues in the same manner. Maharashtra which is most affected by infections, is ready to allow the private industries to start initially with 10 per cent and then increase it taking account its impact. The other states like Karnataka, Andhra Pradesh and Tamil Nadu will also be cautious if the post unlocking period shows big spurt in covid cases which is a big possibility. So the situation , as of now is very fluid and the main reason is that while in other countries, the infection rate is coming down due to high level of testing, in India, the rate is not flattening and experts are predicting a very critical period in June.
Thus, the Prime Minister Narendra Modi may pat at his back for his performance in Covid management in the last three months, but the experts have pointed out the major lapses in the planning and the Government's lack of interest in seeking opinion of the real experts. The victims of the Government’s gross failure are the common people including the jobless, the migrant workers and the MSME units which have no funds to pay their workers. They are not sure of the demand picking up during the near future and the credit facilities at concessional rates, really do not mean much to most of the MSME units.
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 cannot 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 has 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.
The process of reviving the economy is a long one. But the Government policy makers are forgetting the moot issue that at the present stage of the economy, most of the people including the salaried class are so pauperised that they lack funds for spending on essential consumption goods. The industries are shaky since the situation is uncertain as regards the demand position. The jobless and the migrant workers including those in rural areas are worst hit. The situation can only improve by transfer of substantial cash funds to both jobless, and the people below the poverty line to sustain themselves as also to pep up demand in the economy. This is the only way now to protect the jobless and to ensure return of the migrant workers to their earlier working sites. Without this, all so called packages will give no results to save the economy as also the livelihoods of the lock down hit workers.
(IPA Service)
UNLOCKING PROCESS OF THE ECONOMY WILL BE A DAUNTING TASK
REMOVING THE PLIGHT OF JOBLESS HAS TO BE THE PRIMARY FOCUS
Satyaki Chakraborty - 2020-06-02 09:52
The unlocking process of the Indian economy in phases which started from June 1, is going to be a tortuous one and the tackling of the problems emanating from the opening after 68 days of lockdown in four phases, requires visionary leadership from the centre as also the state governments. The centre this time left the decision to a big extent to the states since it perhaps understood the dimension of the damage that was caused to the economy and the lives of the common people, especially the migrant workers by sudden announcement of the lockdown from March 25. The damage is so extensive and the Covid management as of now is in such a precarious position, that the industries which are opening, may not get the confidence that the market for their products will improve soon.