As tensions amongst the people of the nation continue to peak with the speculation of extension of the 21-day national lockdown, the Federation of Indian Chambers of Commerce and Industry (FICCI) provided a report regarding its concerns on 10 March Friday.
As the number of positive COVID-19 cases rise to 7,598, several Chief Ministers and experts have appealed to Prime Minister Modi to extend the current national lockdown past 14 April due to the exorbitant burst of cases. PM Modi will be conducting a video conference on11 April to discuss the exit strategy with the Chief Ministers of various states.
To express its concerns regarding the economic consequences, the FICCI had stated that the Indian economy will not be able to survive a lockdown for several months and that India must slowly emerge from the lockdown, continuing the preventative practices. It stated that in March alone, the country witnessed an unemployment rate boost of 23.8 percent due to the shut down of several manufacturing units, economic units and the sudden upheaval of migrant workers who were left jobless according to the data reported by the Centre for Monitoring Indian Economy.
To ensure that such economic consequences do not become fatal for the nation, FICCI
provided a report of suggestions that are to be considered by the Chief Ministers and PM
Narendra Modi during their video conference discussion to take a final decision on the
“Suggestions for exit strategy”
FICCI suggested that businesses should resume their functioning to reduce the impact of the economic disaster to follow and that the exit strategy should be slow and should consider normalizing the economic and social activity while maintaining systems to control the spread of the disease.
It also suggested that the exit strategy should include the practice of social distancing and protection of the weaker sections to reduce the burden on the medical sector in terms of health care cost, morbidity, and mortality.
In line with the recommendations of Raghuram Rajan the former RBI Governor, FICCI
suggested that those areas which had no cases and no exodus of migrant workers should allow all sectors and services to re-start their operations. These areas should also allow domestic and local procurement and that there us be swift transportation without restrictions of these goods to these areas. According to the report, this transportation would be done using buses and railways and that migrant workers be transported using these special means to work in those areas after proper testing and screening.
Further, addressing the agricultural sector, the report stated that in light of the harvesting
season, the scarcity of labor has had a huge impact on this sector and that district collectors must be advised to ensure full and proper harvesting and that MNREGA workers should be utilized for this activity to increase employment to improve the situation.
The report also suggested that e-commerce platforms and their value chain players should be enabled to ensure that supplies are not stopped and people can engage in consumer activities while staying at home. It also added that the government needs to assure that on-ground e-commerce is realized with Ministery of Home Affair’s orders.
Further to protect the small business which has faced a huge crisis due to the pandemic which seeks to threaten their existence, the government was advised to keep higher import duties for products other than essential items and raw materials to a finished good for a period of at least six months which would allow the rebuilding of the domestic economy.
In terms of the uncontrolled “dumping” from China, the FICCI report suggested that the
government prepare a policy response that would deal with strict anti-dumping duties measures for specific products.
“Major role in decision”
While the IMF and Niti Ayog have pointed towards a global recession, one which shall not spare India, the FICCI suggestions provide certain strategies to ensure a steady economy in these trying times which would not allow complete stagnation as the country cannot afford such a situation. These recommendations are to be addressed in the video conference and are expected to play a vital role in the exit strategy as well as the decision regarding the extension of the lockdown.