The prime minister rightly congratulated rural population for protecting villages from infections of Covid-19. It happened because of social structure of villages where everyone knows each other that helped in identification of outsider and their medical check up to rule out transmission, observance of social distancing and restricted movement due to suspension of public transport and lockdown of urban centers.
The rural population checked transmission of deadly virus by themselves but looking towards government for economic miseries caused by prolonged lockdown at the most active session of farming i.e kharif harvesting season and rural non-farm activities (RNFE) due to increased money flow from agriculture and remittances.
As the central government is contemplating on fiscal stimulus to de-stress the different economic sectors, therefore, it is appropriate to assess the impact of lockdown on rural economy comprises farmer, farm labour, non-farm labour and migratory semi-skilled and unskilled labour. Due to Modi government's anti-producer inflation targeting policy, the farmer economy was already on the brink which is evident from the dole out scheme PM-Kisan Samman Nidhi Yojna of Rs 6,000 per annum, despite the record production in three consecutive years.
Unfortunately,the lockdown period preceded with unseasonal rains and hailstorm in north-western India and coincides with the most intense farming operations i.e. harvesting, storage, selling of Rabi crops and preparation for Kharif crops.
Sensing the importance, Government of India exempted agricultural operations from lockdown within two days of imposition but without much significance because of chocked supply chains of perishables — vegetables, fruits, milk, poultry and fisheries and poor execution of exemptions orders. It is difficult to assess the farmers' loss because of lockdown but as per Credit-Suisse report fruit and vegetable farmers only lost Rs 20,000 crore.
There are 14.43 crore agriculture labourers dependent on agriculture for livelihood, lockdown will affect them directly because of diminished paying capacity of farmers due to losses and indirectly because of oversupply of labour forces.
The labour involved in non-agriculture job and migratory labour have lost jobs because of closure and work suspension of MSME and non agricultural activities.
There are 13.9 Crore migratory labours in India engaged in all sectors of economy and play important role in economy, specifically in rural economy, through remittances. As per records, 9.95 out of 15.92 crore rural households are getting Rs 2,500 crore annually.The exodus of migratory workers for their villages not only exposed the drawbacks of urban centric growth model but impending economic disaster.
After reaching villages, they will be part of unemployed force and raise the unemployment rate which was 20.21%, as per CIME.
The MSME is providing job to 11 crore semi-skilled and unskilled workforce after agriculture is struggling to cope up with abrupt lockdown. The government order of salary payment for the idle period to the workers, loan instalments and fix land and electricity charges of lockdown period are major issue.
In view of uncertainty of lockdown period, prospective demand scenario in national and international market etc, their association demanded various concessions and as per media sources Nitin Gadkari, Minister MSME, forwarded Rs 1 trillion package to Finance Minister.
Revival of rural economy is important because of its large size and acute financial crisis among labour and farmers. The revival package required sympathetic but cautious approach as lockdown affected different class of farmers and labour differently.
For farmers involved in perishable commodities compensation is needed as they have suffered irreversible losses because of chocked supply chain. In future corrective measures are needed that include emulation of aggregation model of milk societies like Amul, Parag and Mother Dairy from fixed spots in villages at pre-agreed price by government/adhtiyas in sanitised vehicles by trained persons. It will not only save rural populations from Covid-19 transmission but also increase confidence of consumers on the quality of fruits, vegetables and milk.
The vegetables and fruits mandis should be disaggregated to avoid exposure for example Azadpur handles 14,000 tons of vegetables and fruits in an area of 80 acres.
The seamless supply chain is need of the hour. The vegetables and fruits carts, which supply in Mohallas need identity card and disease-free certification. Because of rumours and WhatsApp messages, people are hesitant in vegetable and fruit purchase. A sustained campaign is needed like newspaper that Covid-19 is not transmitted through food products.
The government should start purchase of grains grown in Rabi season in full swing in disaggregated manner like Andhra Pradesh government. If market price of non-MSP crops slide below certain level then government should intervene to maintain the price at reasonable level so that profiteers would not get chance for exploitation.
The concession on credit card loan like interest waiver, reduced/staggered electricity tariff, payment of sugarcane arrears which is Rs 16,000 crore in UP alone, assured availability of inputs for Kharif crops like seed, fertiliser, insecticide etc are other important issues and need immediate government consideration.
The tackling of unemployment in rural areas is of prime importance, the number of job seeker in MNREGA which is 7.86 crore in 2019-20 is increasing in astronomical speed; for example in Rajasthan, the number of MNREGA worker swelled from 6.08 lakh to 8.30 lahk from April 17 to April 22. After Kharif sowing i.e July 20, agriculture activities will come to halt for three months, during this period agriculture labour will need MNREGA support.
To sustain rural economy and creation of demand for MSME, a generous package is needed, this package should be aimed to mitigate the losses to farmers because of lockdown and what the prime minister said during interaction with village head — "make every district self-sufficient".
For self-sufficiency, the immediate need is creation of infrastructure like hospitals, cold storage, ware housing facilities, mandi yards, alternative employment activities like cottage industry and food parks in rural areas.
At the moment there is availability of one hospital bed per 3,100 villagers and in absence of mandi and storage facilities, the fruits & vegetables first carried to cities and then villagers bought back for consumption.
For self sufficient, the guiding concept may be PURA (providing urban amenities to rural areas) forwarded by Former president Dr APJ Kalam and partially adopted by Akhilesh Yadav government in UP through setting up of mandi on Lucknow-Agra green field highway, smart village through I-SPARSH scheme, Kamdhenu Yojana linked with coopetive dairy scheme etc. It can be achieved through formulation of different scheme.
The demand in rural population which is 68.84% will energise the national demand cycle not because of income but because of numbers. The IRDP scheme during drought in Maharashtra and stimulus of ₹140000 crore as ₹60000 crore in MNREGA and ₹80,0000 crore as loan waiver to farmers not only saved rural economy but help in tide over the natural calamity in 1980’s and global recession in 2009.
(Sudhir Panwar is Professor at University of Lucknow and former member of Planning Commission UP. Views expressed are personal.)