Finance minister Nirmala Sitharaman has so far given the details of the stimulus package, announced by the Prime Minister, in three tranches. The main focus of these announcements have been to support the micro, small and medium enterprises which employ crores of workers.
V S Pandey
On 12 May, Prime Minister Narendra Modi addressed the nation for the third time on the national lockdown and hinted at an extension of the lockdown in a different form and also announced a mega Rs 20 lakh crore package to kickstart the economy. The central government is expected to soon announce the new guidelines regarding the lockdown 4.0. It is likely that many more economic activities will be permitted to resume. Although the number of coronavirus positive cases have already crossed the 82,000-mark and the number of deaths is nearing 2,700,the government is under tremendous pressure to open up the economy at the earliest.
The worst sufferers due to this pandemic have been the daily wage earners and migrant workers. It is very saddening to see thousands and thousands of hungry and poor migrant workers walk on foot or cycle back to their homes hundreds of miles away. Thousands of them are desperately trying to catch any mode of travel such as trucks , tankers, tractors to somehow reach their villages, with the so-called social distancing norms being thrown to the wind. The question is why state governments such as Maharashtra, Telangana, Punjab, Haryana, Andhra Pradesh and Delhi, from where the migrant workers are moving away in droves, are silent about their plight. It was the responsibility of the state governments concerned to not only provide food and shelter to the migrant workers but also transport facilities when they expressed the desire to return to their home district. It is not that they wanted to return to their home free. Every one of them is paying a heavy cost that would be beyond the comprehension of ordinary mortals. The pictures of thousands of our poor migrant workers trying to get back home for the last few weeks has shamed the nation. What these state governments and the state machinery completely lack is empathy and any sense of responsibility towards these helpless people who are one of the most integral parts of our economic machine. There is still time for the state governments to act. They need to tell the district administration in their respective states to provide as many buses as needed and the necessary food packets or financial support to carry all those travelling on foot or otherwise within their district boundaries to their home districts or as near as possible. Just this one step will ensure that within the next two days, every migrant labour will reach his destination safely. Soon after the economy opens up and starts operating full steam, then this compassionate support will act as a positive pull to bring them back to work. All these arrangements are going to cost the state governments some crores of rupees at the most, but the country will be spared the shameful sight of the plight of lakhs and lakhs of these helpless migrant workers -trudging hundreds of kilometres – many literally collapsing by the wayside. Better late than never.
The finance minister has so far given the details of the stimulus package, announced by the Prime Minister, in three tranches. The main focus of these announcements have been to support the micro, small and medium enterprises which employ crores of workers. Various measures to support them include Rs 3 lakh crore in additional credit to these enterprises through banks. This is the most crucial support to MSME’s to bring the economy back on track. But the government will have to monitor the progress and implementation of these measures and ensure that the benefits really reach the targeted beneficiaries. The past experience with such measures has not been particularly encouraging. There has been a tendency on part of the banking system to use provisions of the stimulus package and additional funds to first adjust the outstanding amounts due from these enterprises and save non performing assets. This should not be allowed to happen. One way is to obtain regular feedback from beneficiaries and set up a mechanism of monitoring so that the MSMEs get the required working capital support to bring their enterprises back on track. It is hoped that the measures announced by the government will help ease the economic distress and bring crores of workers back into the production process.
Many of the elements in the stimulus package announced so far relate to an increase in credit flow to production units and the agriculture sector. They will be able to spur the economy and bring India back on the growth path if, and only if, it is ensured that they are implemented in letter and spirit. This is where our track record is abysmal. The challenge before PM Modi’s government is to reverse this trend, and show that his government has the capacity, drive and skill to achieve the set goals. (Courtesy: The Hindustan Times)
(VS Pandey is a former IAS officer. He retired as secretary, department of fertilisers in the Government of India)