Economic Highlight
New Delhi, 12 March 2021
Another
Lockdown?
PLAN
JOB PROTOCOL INSTEAD
By
Shivaji Sarkar
India has to learn to be in the working mode
and not shut or lock itself down repeatedly. After loss of productivity, jobs
and severe thaw in the economy for a year, it should have evolved a protocol to
restore normal working conditions. The hits come at a time when the International
Monetary Fund just predicts a possible 12.5 growth in 2022 and forecasts India
as the fastest-growing economy. The second erratic closure may throw a spanner.
During the last 100 years it has suffered
many epidemics but never closed down the establishments. During those difficult
times all individuals and organisations came together to strive and restore
normalcy. The mid 1990s Surat plague was also combated like that and the dirty
city re-emerged as a beautiful clean destination but it did not shut down its
business activities.
Even after nine months after the unlocking
process most industries, including education, tourism, travel and even
government offices have not bounced back to the usual mode. Direct and indirect
job losses are hitting not only the economy but social and family lives. The
minus 23.9 per cent fall in GDP during the lockdown and still speculations by
national and international organisations about the growth and another bout of
widespread closures and uncertainties are hitting all activities.
The country remembers that the nationwide
sudden lockdown on March 25, 2020 at a four-hour notice led to 10.9 million
(1.1 crore) jobs being lost and termed the worst-ever year for the job market.
It does not include the trek back of at least another 10 crore migrant workers,
of a supposed 18 crore, to their homes impacting MNREGA expenses.
There is no centralised data available for
how many jobs were created during July-December 2020, a volatile period. In
total, Human Resources consultants
estimate one million (ten lakh) jobs were added during this period. Now many of
these jobs, most in irregular employment, are threatened to be lost again.
Many companies like Parle Products, Tata
Motors, Mahindra & Mahindra, Ceat and Axis Bank have largely gone back to
WFH format for corporate employees. Many others like ITC, Samsung, RPG, Dabur,
Haier, Vedanta, Vivo and Panasonic have issued new guidelines to the workers.
Aditya Birla group Global HR Director S Misra says that office attendance may
come down to 30 per cent against the present 50 to 60 per cent. While this reduces
companies’ productivity or not it does affect travel and transport, restaurant,
entertainment and allied sectors.
According to CMIE, since January 2021 about
12 million additional people got jobs, the highest since March 2020. But the
April lockdowns can make many of them lose it again.
The stock market is again rocked with both
BSE and Nifty slipping every day, banks fretting over another spike in defaults
and credit quality, and the manufacturing activity at its lowest pace in seven
months restricted by COVID-19 panic. The curbs, imposed almost all over the
country and beginning of a second wave of exodus of migrant workers back to
their home, could dent manufacturing, core sector activities, supply of goods
& services and the overall demand.
The rating agency ICRA says that bad loans of
Indian banks could rise to 9.7 per cent in 2021 and 10.2 per cent in 2022 from
gross bad loans at 9.6 per cent in March 2020 and 8.3 per cent in December
2020. The December decline is due to writing off of Rs 1.1 lakh crore of such
loans.
A nation trying to recover is being hit hard
again. Retailers Association of India (RAI) estimates retailers will lose about
$5 billion in Maharashtra alone in April. It says that this State alone
accounts for 10 per cent of $85 billion of India’s annual retail sales. It says
that sales of automobiles, consumer durables, smart phones and apparels, which
have just started recovering, will be adversely affected. Even partial
lockdowns in different parts hit sales. Kirana stores across the country report
that there are no major increase or customer walk-ins.
Work from home occasionally for maximum
worker utilisation cannot be a permanent mode. The online mode in a poor
country like India with critical cash flow in rural areas increases hardship
and is devastating the education sector, largely private as income-deprived
parents are unable to pay the tuition fees leading to closure of several lakh
budget schools in Bihar, Uttar Pradesh, Rajasthan, Madhya Pradesh and many
other States. They can neither afford increasing data costs nor they have
connectivity nor even smart phones or laptops. The new generation feels not
only deprived but also discriminated leading to a severe social divide. In
Bihar, the budget school owners are up in arms against the irrational
lockdowns.
The situation remains alarming as the factory
activity grew at its weakest in March 2021. The Nikkei manufacturing purchasing
managers’ index (PMI) declined to a seven-month low of 55.4 from 57.5 in
February on demand squeeze. A Reuters survey says that Asia’s third largest
economy despite some recent improvements is heading for the biggest risk to the
outlook. The rupee is already taking a hit for national, international
situations as well as severe price hike and income squeeze. The country cannot
also relax fiscal deficit norms as suggested by Home Minister Amit Shah. Rising
government debts may have many dangers.
The second largest populated country having a
capacity to grow fast has to change its policies. It cannot force repeated
closures of social and economic activities for an unconfirmed fear of a
disease. Some health sector people link the new supposed surge to intense
vaccination. Even the efficacy of the vaccine produced in a jiffy is being
questioned as the production and testing process are yet to be made public. It
is also said that pneumonia vaccine has yet not been found even after over 100
years of modern medicine. The concerns may remain though the fears are more
speculative.
However, it calls for the nation and Prime
Minister Narendra Modi to reconsider whether every now and then the country
should impose jittery closures. A protocol must be developed so that it
continues its work as during war time with least of disruption during any
future epidemic. Diseases surge and go but a nation has to sprint to success
without closing down for a day. ---INFA
(Copyright,
India News & Feature Alliance)
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