ECONOMIC EFFECT OF PANDEMIC : POOR PEOPLE ARE THE WORST HIT
Updated: May 28, 2020
It is looking like covid-19 pandemic is badly affecting us as a country. We are nearly two months in a countrywide lockdown, But our confirmed cases of covid-19 are increasing day by day. On 24th march Prime Minister Narendra Modi ordered a Nationwide lockdown. Till then inspite of certain relaxation we have continued our lockdown. Due to lockdown for the sake of saving people from getting infected peoples day to day life will got affected in a long run. Looking like Poor peoples of our country are the worst hit. Migrant Workers have lost their job . They wanted to travel to their homes. Many walked thousands of kilometers. After lot of hesitation central goverment started shramik special non stop trains. But they charged ticket fare from the poor workers. After protests centre said they will give 85% of fare rest will be paid by workers home state government. But the thing is dissatisfied workers will damage our countries productivity. In 2014 after BJP government came at the center they carried more liberal economic policy, privatised different sectors. But in the last quarter of 2019 our GDP growth rate slipped into 4.5% . COVID-19 made a damaging effect to our slipping economy. Nobel Laureate Abhijit Banerjee gave a idea to the government to give money to the poor. It means direct cash transfer to the bank account of the poor to grow the demand. Demand will activate the market. But our government is very much reluctant on this issue.
On May 12 Prime minister announced a relief package of Rs. 20 trillion that is about 10 % of our country’s GDP. After Finance Minister Nirmala Sitharaman unwrapped this package in tranches, there is widespread disappointment among most stakeholders.
There is relief for agriculture in the form of a concessional credit line of Rs 2 trillion, but loans are neither automatic or assured, while marketing reforms and infrastructure creation are distant promises. The MSME sector, the backbone of the economy that provides 25 per cent of employment, 32 per cent of the GDP and 45 per cent of exports, is unhappy despite the Rs 3 trillion line of credit for loans without collateral. In their experience, lenders are not always supportive in extending loans, while buyers (central and state governments, public sector firms and the private sector) owe them as much as Rs 5 trillion. What is more, most MSMEs just do not have the resources to pay wages or meet fixed costs on electricity, rent or interest during the lockdown period. Ironically, there is little for public health, already in a dilapidated state. The poor or the migrants, caught up in their struggle for survival, might not have voiced their opinion so far on the grossly inadequate relief package for them, but the harsh realities of this period — hunger without jobs, incomes, shelter or dignity — will be embedded in their memories for long. This economic deprivation will have social and political consequences.
There are statements of good intentions. There is a recycling of ideas or schemes from earlier budgets. There are policy reforms with a longer-term perspective. But there is little cohesive focus on Basic needs of poor people , and their demand.