Pro-Corporate Thrust of Economic Package Flies in the Face of ‘Atma-Nirbharta!
Govt must address Lockdown Crisis which has pushed millions into penury:
Urgent measures of food, transport, income, and work support are needed
19th May, 2020: National Alliance of People’s Movements (NAPM) condemns the absolutely insensitive, anti-poor and anti working-class approach of the Govt of India, reflected once again in the ‘mega economic package’ of Rs. 20 lakh crores, announced by the Prime Minister and Finance Minister in the past 5 days. Despite all word-play around ‘Atma-nirbharta’, the current regime has ‘Abandoned’ millions of toiling masses, who are left to fend for themselves in the midst of an unprecedented pandemic and horribly managed ‘lockdown’! Instead, the agenda of corporatization and privatization has been pushed forth, across multiple sectors in the garb of ‘relief’ and ‘development’!
The period since the sudden unplanned for national lockdown was imposed on the country, we have witnessed hitherto unknown levels of distress and displacement across the country. The pictures of migrant workers who have lost their livelihoods struggling to go back to their home towns – walking hundreds of kilometres in the scorching heat of the summer sun, with children, elderly and meagre belongings – are something that history will remember as a shameful period when lakhs of fellow human beings were allowed to face such indignities while the ‘powers-that-be’, watched on. The Pradhan Mantri Garib Kalyan Yojana (PMGKY) that was announced in the first week of the lockdown was hugely inadequate and even as late as the beginning of May the food and cash transfers had not entirely reached a large proportion of the beneficiaries!
The continuing exodus of migrants from cities, the ever-expanding lines at feeding centres run by governments and civil society organisations and the never-ending distress calls being received by various helplines also exposed the severe inadequacy of these measures. While after allowing only road transport initially, some ‘Shramik Special’ trains were finally set into motion, one and half months of complete lockdown, so that migrants could return back. However, this was also done in an utterly chaotic, non-transparent manner, where in many states people were expected to even pay for the tickets. There continues to be complete confusion over whose responsibility it is to ensure the safe passage of the workers – the home states or the destination states – with both trying to get away with least liability.
Apart from the migrant workers, there are reports also of loss of livelihoods and resulting food insecurity amongst various groups of people including farmers, informal sector workers, small and medium enterprises and so on. With the closure of all economic activity, supply and distribution chains all over have been disrupted. It is clear that resumption of activity would require a major boost coming in the form of investments and fiscal expenditure by the central and state governments towards creating purchasing power. In simple terms, the government needs to put money in the hands of people!
In this situation of acute distress all over, the Prime Minister in his speech on 12th May announced what sounded like a grand vision for an ‘Atmanirbhar India’ which included an economic package of around Rs. 20 lakh crores or about 10% of GDP. Unfortunately, but predictably, as the details of this ‘package’ were revealed by the Finance Minister over 5 days of press conferences, it became clear that this is yet another jumla where the central government wants to get away with doing almost nothing while seeming to be doing something very big!
As has already been written in many media reports, the outgo of the government in the form of fiscal expenditure seems to be coming to about Rs. 2 lakh crores i.e. 10% of what was promised. Along with the fact that the economic package does not make the much needed expenditure that the economy currently requires in the face of the slowdown it faces, it is quite unacceptable that this crisis is being used an opportunity by the government to push for ‘reforms’ which further the neo-liberal agenda of favouring profits over wages. The package therefore includes, for example, commercial mining in coal sector, corporatization of Ordinance Factory Board and removal of restrictions on Indian airspace. A whole host of privatisation and PPPs have been announced in electricity distribution, social infrastructure and even allowing the private sector to use ISRO facilities! When so many public sector enterprises are on ‘distress sale’ and path of privatization, ‘Atma-nirbhar Bharat’, is but a cruel and indefensible hoax!
A look at the various measures announced shows that the government is deliberately oblivious and insensitive to the current crisis the country is facing as a result of the pandemic and the lockdown. While the package has a number of long-term measures and reforms, few of of them even desirable, there are hardly any responses to mitigate the hardships being faced by people currently. The brazen neglect of the urgency of the situation is beyond comprehension and unacceptable. Digitisation in education and meagre allocations for health sector when we are faced with a health crisis show clearly that the package completely fails to respond to the current situation!
The lockdown came at a time that was extremely crucial for agriculture. Harvest was disrupted in many places or in others where harvest was completed there were barriers in reaching the crops to the markets. Reports suggest that compared to last year, mandi activity this year is much lower and also that many have been forced to sell at lower prices, much less than even the costs incurred. Rather than announcing support to the farmers in the form of greater decentralised procurement of all crops, income support through cash transfers, higher MSPs, support for inputs for the next cropping season and so on, as part of the economic package, the only announcements relate to extending coverage of credit. While expansion of credit access for farmers is a laudable objective, this is not an adequate measure to respond to the current crisis. Losses borne by the farmers due to closure of agricultural activities also need to be compensated for, which has not happened in spite of the ‘Crop Insurance’ scheme.
According to an RBI report in 2019, only 40 per cent of India’s small and marginal farmers are covered by formal credit. Boosting concessional credit through kisan credit cards (KCC) can also be expected to have limited reach considering that according to Nabard’s NAFIS Survey 2016-17, only 10.5 per cent of agricultural households were found to have a valid KCC. Further, the ‘reforms’ announced as part of the package towards deregulating agri-business will only benefit agribusiness corporate houses and multinational corporations and not the peasants and poor farmers. Despite the grand announcement that Rs. 20,000 crores would be allocated for the fisheries sector through Pradhan Mantri Matsya Sampada Yojana (PMMSY) from 2020-21 to 2024-25 to develop marine and inland fisheries, it must be stated that PMMSY is a capital-intensive, export-oriented scheme, not in favour of the large section of the landless and asset-less small-scale fish workers.
In the MSME sector too, which was supposed to be a focus of the economic package, the attention is mainly only credit-expansion measures. While interest subvention for SHISHU Mudra loans is a positive step, it must be remembered that most of these loans were anyway not doing well and the borrowers were not in a position to repay. On the 3 lakh crore loans to MSMEs, there is some confusion with regard to the new classification of these enterprises as well as what the terms of the loans will be. It appears that support to MSMEs even in the form of loans is to those units that have turnover of 1 crore or more! However, the basic point remains that these are all supply-side interventions many of which may even be desirable but they are just not adequate to address the crisis in hand. In the current economic situation, where there has been such a massive onslaught on people’s purchasing power it is difficult to imagine how there will be any demand for new loans where producers are faced with declining market demand for their goods. Cuts on the imports also may result in the boost to the large Indian corporates and not to the decentralised labour-intensive economic paradigm. Notwithstanding the shrill rhetoric of the PM on ‘gruhodyog’ and ‘gramodyog’, there is nothing much in the package for village co-operatives.
The moot point is that the economic package announced so far, completely misses the mark in responding to the present crisis situation. While it does include some desirable components, like for instance, building affordable housing complexes for migrant workers and urban poor, these are all long term schemes whose details are unavailable as of now. What is there to address the immediate situation of hunger is the announcement that 8 crore migrant workers will be given free 5 kgs food grain and 1kg chana dal for two months. This too, is too little, too late. Notably, the dal announced under PMGKY, back in March did not reach many states and the people, till date! Estimates suggest that even to meet the requirements of coverage under the National Food Security Act (NFSA), an additional 10 crore beneficiaries need to be added (67% of 2020 population).
As a result of crisis now, one can only expect that an even larger number of people would be requiring food support. Further, given the exclusion errors in identification and the need to keep things simple in the current context, what would be required is a universalisation of PDS, where it is announced that any person who approaches a ration shop for grains is given food irrespective of whether they have a valid ration card or not. This can be done on the basis of any identity card that the person has. Given that the FCI godowns still have over 65 million tonnes of food grains and procurement operations of the Rabi crop are ongoing, universalisation of the PDS with higher quantity of grain is something that the government could have announced immediately. Rather than providing the grain to state governments at market prices of Rs. 21/22 per kg, the least that could be done is to make them available for free or at NFSA prices so that state governments are able to expand the PDS for everyone in need.
Similarly, the other available infrastructure that could be used to expand coverage and support is the MGNREGA. Providing work proactively in every panchayat, ensuring minimum wages and removing the limit on the number of days of work that a household can get would have been ways in which people could have been provided some relief immediately. Along with this, the platform could also be used to make much needed cash transfers to people. Economists and activists have been recommending a cash transfer of at least Rs. 7,000/- per household per month. This should be made to all beneficiaries of old age, disability and widow pensions as well. Schemes such as the PDS, MGRENGA and cash transfers to poor, farmers and informal sector workers would be most effective in generating demand across the country which is much needed not only to address the distress situation that people are in but also to revive the economy.
While images from across the country of migrant workers walking hundreds of kms to reach home is heart-rending, the imminent distress that other lower-income and middle-income groups face is also going to be huge, what with an all-time low economic activity. CMIE estimates indicate that about 1/4th of the working population i.e. 12 crore people are already unemployed. This massive level of livelihood loss requires radical measures, none of which is available in the current package. Instead of addressing the grave issues faced by the working class, both the Centre and multiple states have used the cover of lockdown to further dilute protective labour laws and regulations. In yet another recent low, at the behest of businesses, the Centre has withdrawn its previous Order of 29th March on payment of wages to workers amidst lockdown, further jeopardizing their already precarious condition!
Unfortunately, ‘Atma-nirbhar India’ does not mean government supporting people to become self-reliant, rather the government’s way of telling people that it has abandoned them in this moment of crisis and that they should somehow fend for themselves! This is indeed a wake-up call for all people’s movements, trade unions, mass organizations and the people-at-large to organize against the skewed priorities of the current regime and assert what is rightfully theirs in our political economy.