Over the coming few weeks, as testing is ramped up, greater clarity will emerge about the spread of the coronavirus.
A day after the prime minister announced the extension of the nation-wide lockdown, the government issued guidelines for partially lifting the restrictions on some economic activities in select areas. The guidelines, operational from April 20, provide for relaxing restrictions on agriculture and allied activities, parts of the rural economy, including construction of roads, industrial projects and works under the MGNREGA, manufacturing in special economic zones (SEZs), industrial estates and townships, and e-commerce services, among others. These relaxations are designed to ensure that economic activities are gradually restarted in rural areas, and in relatively isolated pockets, which have been less affected by the coronavirus, as opposed to urban centres where the hotspots are concentrated.
The effect of lifting these restrictions will be twofold: First, it will help ease supply constraints of goods, thereby helping plug shortages till the lockdown is fully lifted. Second, this will ensure that the vulnerable sections of the labour force — especially the casual rural wage labourer and the migrant labourer — get back to work, addressing, to some extent, the issue of endangered livelihoods. Easing restrictions on farm operations, harvesting and procurement in the Rabi season is a pragmatic step to ensure continuity of supplies. As is the decision to allow works under the MGNREGA — here, the government should not only widen the definition of what constitutes work, it should also ramp up its allocation to the programme, as, given the self-selecting nature of the scheme, money will reach only the most vulnerable. It is also sensible to restart manufacturing in rural areas, and in largely insulated areas such as SEZs — over 41 per cent factories covered by the annual survey of industries, which hire 45 per cent of workers, and produce almost 50 per cent of the output, are located in rural areas. Businesses will now need to firm up their plans on restarting production — keeping in mind both the issue of labour supply and the collapse in demand. Though capacity utilisation rates are likely to be low, limiting the labour requirement, for some of these units, re-assembling their work force, especially if it comprises of migrant labour, will be challenging. And while easing restrictions on their operations should help reduce cash flow problems, as the bulk of the consumption is in urban areas, the challenge is also to ensure the smooth functioning of supply channels.
Over the coming few weeks, as testing is ramped up, greater clarity will emerge about the spread of the coronavirus. Only then can plans to quarantine select areas, restrict movement in others, and open up other parts of the economy, be firmed up. An accurate mapping of the virus will enable the lifting of the remaining restrictions, in a gradual manner.
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