Many-layered Threats

With Covid came lockdowns and economic logjam. It brought anxiety, fear, loss of hope and livelihoods for many. It led to a despair filled movement of migrant workers from workplaces back to their villages and joblessness. On the other hand, came the threat from China trying to gnaw into our Northern borders. While the government has endeavoured to restart the economy and ward off the twin threats from Covid and China, we too as citizens need to chip in

Like most countries of the world, India too is a victim of Covid-19. The pandemic has been around for more than three months now. Lockdowns were imposed as they were considered the sole mechanism to stop the spread, along with social-distancing norms. Lockdowns have had a telling effect on the global economy. The situation of the economy in India is really grim as our economy had already slowed down in the preceding year and now the bad hit by Covid has proved disastrous.

More a facilitator

India too announced a mammoth stimulus package to give a jump start to the economy. The package was of Rs.20 lakh crore which included the measures by the RBI as well, and as per the calculation of the government, the stimulus given worked out to 10% of our GDP.

The government and the country are optimistic about the outcome of the stimulus. The structure of the stimulus is such that it will prove a facilitator in making our economy self-reliant. A major proportion of the stimulus is in the form of credit-guarantees. The industry has to come forward to pick up loans from banks, and as the government will be the guarantor for SMEs, it is believed that there will be no shortage of essential capital.

Many questions

The optimism about the opening of the economy has been questioned by a section of economists. Different calculations have been given to show that the stimulus does not work out to 10% of the GDP. The deferred payments resulting from the execution of guarantees have not been considered as part of the present stimulus. This section of analysts believes that a stimulus should only include present pay-outs to the people and expenditure by the government.

For these intellectuals, a stimulus has to impact the fiscal space. On the contrary, the stimulus announced is such that it will help the economy without skyrocketing the fiscal deficit. A big fiscal deficit will have serious side effects like inflation, and it will prove to be counter-productive to the objective behind giving the stimulus.

Economists and intellectuals must be respected for their dissenting views but we should not allow pessimism to descend upon us. It is a common trait with intellectuals to have diverse views. “If all the economists were laid end to end, they would never reach a conclusion,” said George Bernard Shaw. Edgar Fiedler in a lighter vein has reiterated this view as he said, “Ask five economists and you will get five different answers six if one went to Harvard”.

We all know about the size of our fiscal space, as the same is apparent from our annual budget, which was presented on 1st February, 2020. In the budget, the government hadincreased its expenditure on infrastructure like roadways, while private sector expenditure has been on the decline. With this background, when the fiscal space is in black and white and known to analysts, it is not understandable as to how the pitch was made for more money to flow out of the coffers of the government. This sector of respected intellectuals, however, do not mention the source from which the money has to flow out. The big pay-outs without a fiscal-space may mean printing notes for distribution which no wise economist will approve.

‘The stimulus announced is such that it will help the economy without skyrocketing the fiscal deficit. A big fiscal deficit will have serious side effects like inflation, and it will prove to be counter-productive to the objective behind giving the stimulus’

Dissent to help or maim?

There is no doubt that dissent is the safety valve of democracy. But it should come with the basic objective of helping the country out of the crisis, rather than opposing anything done by the government. We do not know when the Covid-19 crisis will end in the country. Initially, we progressed well when lockdowns were put into force but gradually we fell into its trap. Today, while writing this column, we are the seventh-worst affected country.

Now is the time when people have to come forward for a united fight against the evil of corona. We have to follow the norms announced by the central and state governments. It is imperative to fight on the economic front with a clear resolve. We have to bear in mind that if we keep on speaking as perpetual dissenters, no foreign investors will invest in India. The investors have to be sure about the safety of their investments and assured returns thereon.

Stranded labour

Added to the problems of corona and the collapsing economy, we are also encountering the serious problem of migrant labour. We have just seen that crores of our poor citizens got caught in the lockdown. They had come from different parts of the country to give their services and earn their livelihood in the process. During the lockdown, their earnings stopped and the host states probably failed to look after them as the allocated ration did not reach them. They became emotional and wanted to go to their native places. At this juncture they needed sympathetic and financial support. Though some good Samaritans and NGOs did come out it was not enough. The governments at the centre and the states had to go against the very objective of the lockdown - of stopping the spread of the disease - as they plied trains and buses for them. Dissent on this issue could have been avoided.

Unprotected force

The plight of the poor migrant labourers reminds us of what Peter Drucker said, “The ultimate resource in the economics is people. It is people, not capital or raw materials that develop the economy.” The corona problem has highlighted that our labour force is not well looked after and that they were left in the lurch during pandemics or natural calamities. The labour laws only benefit the work force in the organised sector, which is roughly only 5%of the total labour force. 95% of the labour force in the unorganised sectorisun-protected, and subject to the whims of the owners of the enterprises.

During the current pandemic, the owners, to a large extent did not help them when enterprises were closed due to lockdowns. Many host states did not take care either. We forget that our labour force are the real warriors of wealth creation. Now, when the migrant labourers have gone back to their native places, the industry will face problems when factories are restarted after lockdown. Some valuable time for the industry will be lost before the heartbroken labourer returns or is cajoled to return.

The construction sector is already experiencing pain due to the absence of hard working migrant labour. It is time for the government to do more for the unorganised labour sector, starting with registering them and opening bank accounts, if they do not have one so far. The unorganised sector labour force should then be prompted to get more modern skills in line with changing times as the same is essential for their development. Benjamin Disraeli said, “We need today a well looked after labour force, who are skilled and efficient if we aspire to become an economic power.”

‘During the lockdown, the earnings of migrant workers stopped and the host states probably failed to look after them as the allocated ration did not reach them. They became emotional and wanted to go to their native places. At this juncture they needed sympathetic and financial support’

China’s border threat

Corona is the problem today but the country of origin of corona, China, is proving a big problem too. China has crossed the LAC and its army has housed itself under tents there. There is a report of the movement of artillery and other warfare equipment behind them. India, which is not the India of 1962, has also put its men and resources in equal force there, to meet any eventuality. China’s actions are a clear testimony of its evil intention,when we are reeling with the mounting problem of the corona virus. Nepal too has published a map to claim some part of our territory at a strategic location. China in the company of Pakistan and now Nepal think that they can browbeat India and thus stop us from doing development work or focus on Aksai Chin.

Shun China products

China and Corona have to be tackled in a similar fashion by us. Corona can be stopped by social distancing amongst ourselves while China will learn a lesson if we maintain distance from its products which have flooded our market. The government will do its job dealing with China by talks, diplomatic interactions and if need be by force, and with corona with lockdowns, medical treatment and researching for a vaccine. The battle at both the fronts can be won decisively with a clear resolve by the people.

The famous educationist Sonam Wanghuck (on whose life the film 3-Idiots was based) has taken the lead in boycotting Chinese products and Chinese apps like TikTok. He did not wait for any government order but decided himself as a patriotic Indian. The vision given by our Prime Minister to be ‘atmanirbhar’ (self-reliant) can also be met if we produce the things we need ourselves and also for the global market. We should not depend on products from outside, particularly from an unfriendly country like China. We have a huge trade gap in our dealings with China. The money earned by China from us is being used by it against us by encircling us. We are a big market in the world and if this big market is used for Make-in-India goods, then it will not only beat China in its game but will also help our economy and generate more jobs.

The crux of this column is that we should not depend on the government for each and every action but should become pro-active. The government will come forward to strategise our combined endeavour.