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A second covid wave could starve companies of workers

Photo: HTPremium
Photo: HT

India is in the midst of a second wave of the pandemic. Covid-19 infections have been increasing for the past few weeks since bottoming out in early February. The raging virus has raised concerns about a labour crunch. Mint explores.

India is in the midst of a second wave of the pandemic. Covid-19 infections have been increasing for the past few weeks since bottoming out in early February. The raging virus has raised concerns about a labour crunch. Mint explores.

What is the virus situation?

The coronavirus has been circulating in India with new vigour, infecting well over 45,000 people a day over the past week. Maharashtra, Gujarat, and Karnataka, which are among India’s most industrialised states, together with Punjab and Madhya Pradesh account for about three-fifths of all new cases. The fresh surge has resulted in restrictions in many districts, reviving memories of last year’s complete lockdown. Maharashtra is again the worst-hit state, accounting for about two-thirds of the new infections. The cases may be concentrated in a few states, but the virus is likely to expand its footprint.

Why are companies worried?

Companies are worried because they are staring at a potential labour shortage, raising cost pressures for them should the pandemic intensify. Many migrant workers who had left big cities after an abrupt lockdown last year have not yet returned. The experience of having to walk back to their villages in searing heat remains too painful for them to forget in a hurry. Many who had returned to the metros, especially unskilled workers, are once again headed home. These pre-emptive departures could be a case of once bitten, twice shy, as workers may have no clue what to expect as infections rise.

Can migrant workers be stopped from leaving?

It won’t be easy, given the bitter experience. The government’s “one nation, one ration card" scheme would greatly help migrant workers. States would also need to be predictable in their covid-containment policies and employers must assure workers that they won’t have to fend for themselves in case of a lockdown.

What’ll be the impact of a labour shortage?

If cases surge and workers again flee en masse to the safety of their villages, commercial activity would lose steam. Providers of goods and service would struggle to fulfil orders, clogging supply chains and slowing down consumption cycles. If broader curbs are re-imposed across large swathes of the country, our economy could yet again suffer the twin shocks of demand and supply, dashing expectations of a double-digit expansion in output in the next financial year after last year’s contraction.

How can we keep the economy running?

The one weapon against covid-19 that we did not have last year was a vaccine. We now have two of them, while a few others are in the pipeline. The government needs to vastly scale up the inoculation drive, which began in January. The Centre has assured the people that there is no shortage of vaccines. Worryingly, several variants of concern, including the highly infectious viruses of the UK, South African, and Brazilian lineage, have been detected in the country. We need to observe extreme caution to avoid lockdowns.

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