Economic normalcy on Modi’s radar as he extends lockdown till May 3

Published : Apr 15, 2020 09:34 am | By: anjali chhabra

Economic normalcy on Modi’s radar as he extends lockdown till May 3


The Narendra Modi government has extended the nationwide lockdown to fight coronavirus till May 3, making the Indian shutdown the longest in the world at 40 days.

Favouring a “smart lockdown”, Prime Minister Narendra Modi has decided to go with the opinion of a majority of states and extend the nationwide lockdown till May 3 to lead the country into a critical phase of fight against coronavirus with an important rider of balancing precaution to save lives with livelihood and future growth.

Now, the total number of days of the lockdown, which started on March 25, will increase to 40 and the next week is going to see stricter enforcement of restrictions, signalled Modi in his latest address to the nation.

While the shutdown is being seen as the surest strategy to reduce deaths due to the contagion, a need is also being felt to ensure that a protracted shutdown does not completely jam the engines of the economy. One example of the building frustration among the jobless wage earners was visible in Mumbai’s Bandra area where hundreds of migrant workers, mostly from UP and Bihar, gathered near the railway station to complain against lack of food and money. The police resorted to lathicharge to disperse the crowd that put made a mockery of social distancing norms.

In these testing times, politics has continued to revolve around decisions of the government and the poor health of economy due to the lockdown. The Congress chose to adopt a two-pronged strategy of welcoming the lockdown extension and also questioning the government over the economy and job losses.

Congress president Sonia Gandhi, in a video message, urged people to stay indoors, stay safe and observe the lockdown stipulations, saying it will not be possible to win the battle without everyone’s support. However, former finance minister P Chidambaram said, “The poor has been left to fend for themselves for 21+19 days, including practically soliciting food. There is money, there is food, but the government will not release either money or food. Cry, my beloved country.”
Congress leader Rahul Gandhi has claimed that economic slowdown because of the coronavirus pandemic has made Indian companies susceptible to takeovers. "The Govt must not allow foreign interests to take control of any Indian corporate at this time of national crisis," he tweeted.

Apart from extending the lockdown, the Central government is preparing to test in the coming week the revival of economic activities by offering some relaxations to industry if there is no big rise in infection levels.

The decision of Union ministers and top rung government officials resuming office from a day before the end of the 21-day lockdown on April 14 gave strong signals about the Centre’s plan to partially resume activities in key sector like factories, agriculture and the transport of goods. Sectors like food processing and drinks, plastic products, cement, paper, fertilizer and seed, defence production, power looms, steel, auto parts, compressor, heavy electrical, telecom equipment and all other companies with export orders are likely to get permission to start work partially during the next fortnight, with the condition that they will house their workforce on the site and ensure social distancing during production. 

The success of resumption of economic activity after the end of nationwide lockdown on May 3 is also said to be linked to restart of manufacturing in a truncated capacity over the next two weeks or so with full enforcement of the social distancing norms. The Prime Minister’s Office has even suggested that migrant workers be shifted from shelters to their place of work and kept under precautionary “lock-in” while they join production activity while maintaining social distancing. Special buses or trains might also be run by the Modi government to bring migrant workers from camps to their factories.

To motivate the frontline warriors against Covid-19 and those employed in essential economic activity, the government is also considering insurance cover for them. The proposal on insurance might help agricultural workers, drivers ferrying goods in trucks from one corner to another and workers in essential industries.

With most states favouring an extension of the 21-day lockdown, the Modi government would do good to give them a free hand in deciding the contours of the “smart lockdown” during the next fortnight and allow state government to devise strategy to ramp up resources for economic reconstruction.

For instance, BJP-ruled Assam government has decided to resume sale of liquor while maintaining social distancing. The announcement saw dozens of people line up outside liquor shops in the state as the government permitted sale of liquor between 10 am and 5 pm during coronavirus lockdown.

Another BJP-ruled state, Uttar Pradesh, has prepared to move on with life after the lockdown. Expressing concern over the loss of livelihoods and a fall in the state revenues during the lockdown period, Chief Minister Yogi Adityanath announced that he was aiming for a partial resumption of construction, agriculture, drinking water consolidation, revenue, MSME, industrial and education activities.

From the perspective of manufacturing companies, where production was suspended between March 22-25, chances of re-starting production on a low-scale from April 15 appear bright after PM Modi floated the idea of a relaxed version of lockdown and named it “Smart Lockdown”.

The options before the companies are two-fold – either keep the workers in their premises or transport them to work and back home. Talking to mediapersons, R C Bhargava, chairman Maruti Suzuki said, “It depends what the government decides but transportation is a much better option for us. At Maruti, we have some 25,000 workers spread over Gurgaon and Manesar belt and all of them cannot be housed in the premises.” Maruti is looking to begin production at the minimal rate of 50% or less from April 15.

As for the country’s medical preparedness, there are over 7 lakh beds at government hospital facilities but experts fear the demand for beds at the peak of Covid-19 pandemic could shoot up to as much 18.7 lakh, if the government manages to enforce a moderate lockdown scenario. Experts also point out that the focus has to be on delaying the peak by enforcing multiple lockdowns, hoping that the peak gets pushed down.

Clearly, the Modi government’s decision to relax the nationwide lockdown is partly aimed at avoiding a brutal recession due to shuttered economy and joblessness among a quarter of a billion wage-earners who are staring at the spectre of hunger. However, the government is also mindful of the heightened socio-economic cost of treating a sea of Covid-19 patients if the lockdown is not enforced.

While social distancing seems to be the most effective solution so far, the government would want to inculcate a habit of social distancing among masses and wait for the Covid-19 crisis to peak – even if it means a substantial number  of coronavirus deaths - and hope that the pandemic subsides over the coming months.

The partial opening of the economy appears to be the only sensible solution before Modi who appears to face the “dharma sankat” of saving lives in the immediate future or preventing the future of an entire generation from plunging into darkness due to economic loss inflicted by the current multiple standstills in economy.

While the nation must brace for witnessing a spurt in its Covid-19 toll in the coming 7-8 weeks, the ban on movement of the elderly, children and assembly of five people might continue in the immediate future, especially, in busy and congested commercial cities like Mumbai and Delhi. Paradoxically, the difficult choice before the Central government is whether to sacrifice a person to save a village but Modi seems to be striving to strike a balance between saving lives and restoring a degree of economic normalcy. This is in sync with his new mantra: "Jaan Bhi, Jahanan Bhi (Taking care of both lives and the world)".

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