The spectre of lockdowns is looming large across the country as Maharashtra, Karnataka, Uttar Pradesh, Kerala, Punjab, Chhattisgarh, J&K, Odisha, Gujarat and Haryana have all taken stringent measures to contain physical contacts. Industry is increasingly getting panicked. The reasons are simple. Lockdown means cutdown of production, sales, distribution, consumption, employment and profit. Until now, the central government has maintained that it would not go for nation-wide lockdown as it did during 2020. But, lockdowns by states are harming the economy no less. For instance, the tiny capital state of Delhi, now under extended lockdown, alone contributes 4.94 percent to the country’s total annual GDP.

The current trend of local lockdowns in states could soon erase around Rs. 1,50,000 crore in state GDP, according to the economic research wing of the State Bank of India. Partial lockdowns will also impact substantially state GDPs (SGDPs) of Bengal, Bihar, Odisha, Maharashtra, Karnataka, Chhattisgarh, Delhi, Punjab and Jharkhand. They will also result in the compression of the national GDP for 2021-22. No one is sure how long will the current trend of selectively strong state-level lockdowns and containment zones continue and their impact on SGDPs and national economy for the current fiscal. Going by the records of the first month (April) of the financial year, the situation looks pretty gloomy.

The national picture of the economy is rather mixed. It shows lower industrial production and consumption, interrupted goods distribution by rail and road, renewed exit of contractors’ labour or migrant workers, while work-from-home (WFH) and on-line education are becoming a more routine affair, leading to higher digital transaction and e-commerce explosion. The virus and associated lockdowns are also seen as good time for industries such as healthcare, information technology as also vaccine, oxygen and drug manufacturing. Despite assurances from the union finance ministry and the government that there would be no national lockdown on the last year’s scale, industry is still not fully convinced. The export industry is worried. The production is badly affected. India’s traditional exports, mostly from small-scale manufacturer-suppliers, under severe pressure for want of capital and labour. External demands have also dropped. Selective state-imposed lockdowns, this year, have added to the traditional exporters’ problems.

Local lockdowns in states are becoming an increasing concern for industry. Lockdown restrictions are driving away important migrant workers in thousands. In normal times, these workers serve as a big strength for a number of industries, including construction, mining and quarrying, loading-unloading, farming, painting, cleaning, sweeping and many hazardous jobs. Internal labour migration in India is very large. An increasing number of migrant workers are now homeward bound from places under state lockdowns and restrictions. Unfortunately, these workers receive little policy protection or interventions by way of safe migration, decent working and living conditions in destination areas and access to social security and welfare schemes. Although these workers are a major contributor to the country’s social, industrial and business growth, they have little choice but to rush back home in a situation of crisis as the current lockdowns and economic distress. It’s because of the absence of a proper framework that gives priority to migrants, creates linkages between state and central policies on healthcare, education, social security and facilitating convergence of state and central resources. Migrating workers are becoming totally helpless in the absence of basic support from their employers and the government.

In fact, both the central and state governments need to work with the industry to protect employees and workers, including migrant labourers, against the spread of the deadly virus. Unfortunately, there is a tendency to create a situation of panic to cover the government failure to help educate the society, individuals and employers on self-protective measures. Imposition of lockdowns should be seen as the very last option. Large and medium scale industries are all willing to cooperate in their own survival interest. The latest union health ministry proposal to lockdown some 150 districts showing Covid-positivity rate of over 15 percent of population each is causing further panic through industry and business across the country. Such a step is bound to bring the industry once again to a near-halt, specially after what it went through in 2020-21.

Although India has a total of 741 districts, these 150 districts are among the most productive ones in terms of industry and business. The Mumbai city’s contribution is the biggest of them. It needs to be understood and appreciated that lockdown measures alone are not enough to break the chain of transmission of the virus. It’s a temporary ‘cure’ and may ultimately prove to be much worse than the disease. A more effective vaccination drive, better healthcare facilities in state capitals and districts, universal health insurance, social education for self protection, positive information campaign and strong measures against attempts to spread panic and fake news will save both the life and economy. (IPA Service)