The pandemic has brought, in its wake, a string of issues, such as unemployment, uneven digitization, and migrant labour issues. How will India cope with these problems while holding her own in a post-pandemic era?
In June, the Confederation of Indian Industry (CII) unveiled their theme for 2020-21 called ‘Building India for a New World – Lives, Livelihood, Growth.’ The 10-point roadmap under this theme lays down the way to re-activate India’s economy and its various aspects in a post-COVID era of uncertainty.
The Tech Panda spoke to Chandrajit Banerjee, Director General, CII, about how India should tackle some of the most piercing problems that the pandemic’s arrival has highlighted.
The distribution of this economic loss is important and would need to be assumed by the Government in the highest proportion
“The loss burden on account of COVID-19 is felt most by individuals and businesses as well as the government. The residual loss is borne by the financial sector. The distribution of this economic loss is important and would need to be assumed by the Government in the highest proportion,” says Banerjee.
He says that the Government can ensure a stable financial state by creating a process that cascades into the entire economy.
“We should ensure that financial stability is maintained under these circumstances. The Government would also need to look at how to create new demand, which can be done by fast-tracking its infrastructure projects and ensuring timely payments to vendors and project developers. This will cascade down into the economy while also creating jobs,” he says.
As such, he says the Government has provided small businesses with extended terms of credit and credit guarantees to protect livelihoods. It has also set up funds to provide credit to sectors such as power.
“Ease of doing business and other reforms are also helping to keep investments going and I must say that the pace of new announcements has been most encouraging in this regard,” he says.
The CII just co-hosted the virtual Horasis India Meeting, which gathered a varied group from around India and the world to discuss a post-COVID-19 situation. Banerjee has been with the CII for more than three decades and has been its Director General since 2008. He is responsible for overall operations of CII.
From the ‘Unorganised’ Into the ‘Formal’
80% of the employed population of India lies in the unorganised sector, which has no social security. A lockdown has been necessary to protect the spread of the pandemic. However, it has halted economic activities, creating a precarious situation for livelihoods.
Protecting livelihoods at the current juncture is a key imperative for the nation. With labour reforms and greater flexibility to industry, more workers can be brought into the organized sectors
“Protecting livelihoods at the current juncture is a key imperative for the nation. With labour reforms and greater flexibility to industry, more workers can be brought into the organized sectors,” says Benerjee.
He believes that the Government of India has taken timely action to ensure that the most vulnerable sections in the unorganized sectors and in rural areas have access to food and work.
“It has provided the maximum funds towards employment in rural areas and access to public distribution system for workers wherever they are based. The Government had earlier encouraged formalization of work by bearing the cost of provident fund for low-wage workers in medium and small enterprises,” he adds.
Such actions, he says, have boosted employment in the formal sector, which expanded by as much as 29% in 2019-20.
Digitization in Rural Areas
Another problem area the pandemic has highlighted is the uneven spread of digitization, especially with regard to education and healthcare. Rural parts of India without access to smart devices and digitization are suffering on the education and healthcare front.
COVID-19 has demonstrated the impact of the digital world on the physical world, and we can consider linking workers in villages to work opportunities across the world
“COVID-19 has demonstrated the impact of the digital world on the physical world, and we can consider linking workers in villages to work opportunities across the world. There is need to step up on education and skilling to fully leverage these advantages,” says Banerjee.
He mentions that under the Government’s Digital India program, broadband connectivity through fibre optic cables has reached almost all villages.
“Industry is now capitalizing on this opportunity of reaching out to the remotest of areas through a diverse range of services, including financial services, education, healthcare, entertainment, and so on. With mobile phones ubiquitous, there is a huge scope for expanding on such delivery and creating new employment opportunities in rural areas at the place of residence of workers,” he adds.
Rural-Based Migrant Labour Problem
Apart from highlighting existing problems, the pandemic has also brought forth new challenges. The suffering caused to rural-based migrant labour exiting the metros to go home are suddenly in the spotlight. This is already impacting industry in India. Banerjee points out how this has made the nation realize the significance of this population.
COVID-19 has highlighted the important contribution that migrant workers make in the overall economy
“COVID-19 has highlighted the important contribution that migrant workers make in the overall economy. This was an unprecedented situation, and given the health concerns, workers preferred to return to their homes,” he says.
Currently, due to social distancing requirements, factories and offices have not returned to work in full capacity, but Banerjee is convinced that as health conditions permit, more and more workers will be able to return to their places of work.
“With transport arrangements being available, such return has slowed down and we are now seeing workers trying to come back to places of work,” he says.
The situation undoubtedly has brought into sharp relief the fact that India’s rural areas need more attention.
“We need to also consider how best to deploy workers in rural areas so that the cities are not overcrowded. The digital progress certainly provides new work opportunities and there are also ways to boost non-farm jobs in ancillary sectors, food processing, and new industrial facilities in rural areas,” he says.
Teching Up the Agriculture Sector
India being an agriculture-based economy, most of its labour force is dependent on agriculture, yet the sector contributes only 16.5% to the nation’s GDP. Could technology make the agriculture sector more financially strong?
Agriculture can greatly benefit from a facilitative policy environment
Banerjee says that the agriculture sector is already trying to leverage emerging technology. A sound policy would add a boost.
“Agriculture can greatly benefit from a facilitative policy environment. The government has recently liberalized marketing of produce by removing restrictions on where a farmer can sell. It also proposes to connect farmers with corporates in the farming space,” he says.
“This will bring in more technology, better inputs, and timely movement to markets. Drones, agri-machinery, Artificial Intelligence, big data, and cloud are some of the technologies that are being rolled out in the country,” he adds.
Currently, with forecasts of good monsoon season, the agriculture sector is expected to be strong and enjoy a high growth rate. Banerjee predicts this will greatly help demand in the overall economy.
“With the recent reforms, we expect rejuvenation of the agriculture sector, which will play a critical role in our fight against COVID-19,” he says.
A Wake Up Call
The pandemic has clearly outlined that the weak points of our economic structure need attention or they can crumble the entire structure. While digitization is already there in India in almost every sector, its lopsided development is evident from problems we are witnessing in education and healthcare. Meanwhile, vulnerable populations like the migrant labour population, are finally getting attention that has been long due.
One hopes that this wake-up call for the government, the people, as well as all other institutions, is enough to bring about a much needed change.