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COVID-19 Calibrated Restarting of the Economy

18 Apr 2020

The lockdown in India starting March 25 brought almost all economic activity in India to a halt. A step necessary to save lives, it, however, put a question mark before the livelihoods for millions of Indians, especially those at the bottom of the pyramid such as migrant labour. 

As the economic crisis grew, the need to re-start the economy to save millions of lives in the long-term was acutely felt in many quarters, and CII submitted recommendations to restart the economy in a safe and calibrated way, taking into consideration the geographic spread of COVID-19. 

Taking cognizance of the situation, on 14 April, Prime Minister Narendra Modi announced an extension to the lockdown till 3 May 2020 but with a caveat: post 20 April, partial opening of the economy was permitted. 

The Ministry of Home Affairs subsequently released detailed guidelines stating the select activities permitted, subject to their not being in designated ‘containment’ zones within hotspots; any new area in the containment zone would warrant suspension of activities previously permitted in that zone, and a withdrawal of permission in case of violation of lockdown measures, risking the spread of COVID-19(1). 

This move was welcomed by industry and seen as a pragmatic step in the right direction as it struck a fine balance between safety and economic sustenance.

The guidelines, to be operationalised by State Governments keeping in view ground realities, permitted opening of sectors and activities, with details specified under each, such as  health services, agriculture and related activities, financial sector, social sector, online teaching, MNERGA works, public utilities, movement including loading/unloading of cargo and goods, supply of essential goods, and commercial and private establishments. 

For industry/industrial establishments, permission was granted for those in  rural areas; manufacturing establishments, food processing industries, coal production, mines and mineral production, transportation, jute industries, oil and gas exploration, refinery, brick kilns in rural areas and construction activity in rural areas and within municipal areas where workers are on site. 

Movement of select people was also permitted.

Prohibited till 3 May are travel, buses and metro rail services, taxis, cab services, all educational coaching and training institutes, all industrial and commercial activities other than those permitted, all hospitality services, cinema halls, malls, gyms, entertainment parks, theatres, bars, auditoriums and similar places, all religious places, places of worship and all gatherings.

The guidelines have a separate section devoted to hotspots and containment zones, where strict monitoring would be done to ensure there is no spread of COVID-19. Standard operating procedure for social distancing for offices, workplace, factories and establishments are also specified in the guidelines.

In such a dynamic situation, regular detailed monitoring will be essential to ensure that the restarting of the economy does not, in any way, push back the gains due to the lockdown. CII and industry are working in close partnership with the Government to ensure that due care is taken of both lives and livelihood, given the enormous and far-reaching impact of Coronavirus.

While being focussed on the economy, CII has been equally focussed on relief and rehabilitation measures. It has reached out to lakhs of people in 27 states, providing hygiene material, food and other support to minimise the losses and suffering.

As the economy re-starts, one critically important aspect would be to get migrant labour back to the manufacturing hubs. Also, a fiscal stimulus and industry support at this time would be critically important to ensure that the partial lifting of the lockdown begins to yield positive economic returns. 

CII has recently prepared a white paper on the exit strategy and suggested various measures to ensure that it is well planned, and executed to ensure that the country, gradually but sure-footedly, moves back on track with respect to economic growth.