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The government has allowed people to take up jobs under MGNREGA.  (Phoo: Mint)
The government has allowed people to take up jobs under MGNREGA. (Phoo: Mint)

India adopts cautious approach to reopening of businesses post 20 April

  • Govt attempts to balance the need to limit the damage to the economy against the risk of the outbreak and restore India’s broken supply chain
  • The Union home ministry order also stressed on the movement of trucks from 20 April to clear the logistics logjam

NEW DELHI : India unveiled an initial plan to put its battered economy back to work and restore its broken supply chain, as it sketched out the first cautious steps out of the lockdown.

Starting 20 April, India will allow key parts of the economy, including agriculture, logistics, infrastructure, e-commerce and factories (located outside the municipal corporations and municipalities’ limit), to return to work in areas where no infections have been reported, the government said on Wednesday.

The Narendra Modi government is attempting to balance the need to limit the damage to the economy and livelihoods of as many as 400 million poor against the risk of the coronavirus outbreak spreading further through community transmission.

The plan for the graded lifting of curbs comes even as India counted more than 12,000 infections and 400 deaths and the International Monetary Fund on Tuesday slashed its FY21 growth projection for India to just 1.9% from 5.8% projected in January. Barclays cut its growth forecast for the country to 0% for 2020.

To be sure, the new Union home ministry’ guidelines will not apply to containment zones, areas with covid-19 infections. Restrictions in these areas won’t be lifted. Also, the new permissions are conditional and will be withdrawn immediately if rules are not followed leading to the further spread of pandemic.

“If any new area is included in the category of a containment zone, the activities allowed in that area till the time of its categorization as a containment zone, would be suspended, except for those activities that are specifically permitted under the guidelines of Union ministry of health and family welfare," the government said in a statement.

The long wait
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The long wait

While companies welcomed the new guidelines, economists said the steps do not go far enough to boost growth during the current fiscal.

“Agriculture and manufacturers of essential goods will benefit the most from the revised guidelines. This has to be looked at in line with opening up of APMC (agricultural produce market committee) markets, free movement of essential goods, ration shops to remain open and no restriction on opening up of the establishments for manufacturing the essential goods," Care Ratings wrote in a report on Wednesday.

Mint had reported on 11 April that India is exploring a decentralized strategy to exit the lockdown, which may involve dividing the nation into green, orange and red zones.

“The detailed guidelines issued by ministry of home affairs on relaxation of lockdown after 20th April are in the right direction and will ensure preventive measures for covid-19 spread while permitting certain economic activities to be restarted," lobby group Confederation of Indian Industry said in a statement.

“If implemented well, economic activities can be restored to the extent of 30-40% according to our back-of-envelope calculations," said Deepak Sood, secretary general at lobby group Assocham in a statement.

Apart from allowing all agricultural and related activities, including fisheries, plantation and animal husbandry, the government also allowed people to take up jobs under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a rural job generation programme.

States have called for increasing wages and number of work days under MGNREGA to help millions of people in rural India, including some of those who have moved back to the villages after the first phase of the lockdown was announced on 24 March.

Apart from the financial sector being made fully operational, with bank branches set to follow normal working hours; the home ministry order also stressed on movement of trucks from 20 April to clear the logistics logjam. This will allow Indians cooped inside their homes to access staples and supplies.

The move is also expected to provide relief for truck drivers who are stuck on their way to deliver goods. Empty trucks will be allowed to pick up goods and truck repair shops and roadside eateries on highways, which serve truckers, will be allowed to reopen.

“This is in continuation to what had earlier been conveyed to the states by home ministry. But we received several complaints where trucks were stopped at border checkpoints and not allowed to pass through, even though they were carriers of essential commodities or were empty and going to pick up points across state borders," said a senior Union home ministry official requesting anonymity.

The government has also allowed movement of staff and contractual labour for operations of railways, airports, land-ports, seaports, provided they procure necessary passes from local authorities.

In addition, construction activities for those roads, irrigation projects, buildings and industrial projects have been allowed where workers are available on site and no workers are required to be brought in from outside.

E-commerce firms and courier services are also being made operational from 20 April, along with services “provided by self-employed people such as electricians, electronics repairers, plumbers, motor mechanics and carpenters."

The government is attempting to prevent the current upheaval from devolving into a deeper social crisis.

Nearly 90% of the country’s workforce is estimated to be from the informal sector. There has also been a surge in rural India’s unemployment rate.

Shaswati Das, Elizabeth Roche, Biman Mukherjee, Shreya Nandi and Prashant K. Nanda contributed to this story.

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