IAS Gyan

Daily News Analysis


31st March, 2020


Rabi harvest to be affected for want of farm workers
Challenges that farming sector is currently facing:

-       Lack of farm laborers for harvesting the Rabi crop.

-       Worry about government procurement and their ability to sell their crops, given that many mandis or agricultural markets are still closed.

-       Punjab’s mandis alone employ 3.5 lakh agricultural workers during this season to load, weigh, clean and bag the produce. With migrants leaving back to their home state, how is procurement going to be possible?

-       Many of the mechanical combine harvesters owned by Punjab and Haryana farmers are also stuck in Madhya Pradesh, Maharashtra and Gujarat, which harvest their wheat earlier than the northern States.

Government steps:

-       States have delayed wheat procurement to April 15, in the hopes that the lockdown will be over by then. 

-       States are asking to incentives the farmers in a bid to stagger the procurement process and prevent congestion at mandis in late April. They want to offer an additional Rs. 50 per quintal for those that are able to store their crops and wait to sell until May 5.

-       Relief on crop loans up to Rs. 3 lakh, which are due for repayment between March and May, by deciding to extend 2% interest subvention to banks and 3% prompt repayment incentive to all farmers up to May 31, 2020.

Major Rabi Crops:

-       Wheat,

-       Mustard,

-       Rabi paddy,

-       Maize,

-       Chickpeas

-       Soybean

Reference: https://www.thehindu.com/todays-paper/rabi-harvest-to-be-affected-for-want-of-farm-workers/article31213300.ece

Dairy and vegetable farmers count losses

Dairy and vegetable farmers are facing following challenges:

-       Inability to transport their produce because of lockdown, this has made small dairy farmers throw away hundreds of liters of milk; while vegetable growers are letting their crop rot or dump nearby for animals.

-       Availability of cattle feed is also affected because it primarily comes from Bihar, Uttar Pradesh and West Bengal.

-       Closure of all hotels, restaurants and sweetmeat shops has led to avoidance of all bulk buyers.

-       Government steps have benefited major firms and a State government-run dairy unit who have massive refrigeration units to store milk.

-       Most vegetable farmers have not been able to find transporters to market their produce.

Government steps:

-       Streamlined the supply of milk after the initial hiccups as dairy and milk products and shops selling animal fodder fall under essential services.

Reference: https://www.thehindu.com/todays-paper/tp-national/tp-otherstates/dairy-and-vegetable-farmers-count-losses/article31213485.ece

The cost of the lockdown is pegged at about $120 billion

The cost of the lockdown is pegged at around $120 billion (approximately Rs. 9 lakh crores) or 4% of the GDP.

Affect of the lockdown:

-       Effectively put over 45 million migrants living off daily earnings out of work as 90% of workforce is engaged in unorganized sector. 

-       Sectors like construction projects, mobility services, housekeeping and other informal sector employment will come to a sudden halt. 

-       Government spending in the infrastructure will come down as attention and resources will be diverted to deal with lockdown mitigation.

-       Industries like steel and cement, which did well, last year, will stumble.

-       Aviation, hotels, restaurants, tourism, retail malls will see fall in demand.

-       Even 10-20% job losses among its 7.3 million employees in restaurants across the country would mean up to 15 lakh unemployed. 

-       Only the stronger firms in any sector can have the capacity to keep salary payments going, in the absence of any revenue earnings.

Challenges for manufacturing sector:

-       Serious supply chain disruptions.

-       Sectors like automobiles, pharmaceuticals, electronics, chemical products etc., are facing an imminent raw material and component shortage.

-       The shutdown and resulting loss of revenue is certain to cause a number of bankruptcies and closures, especially in the MSME sector with corresponding disruption to supply chains.

Way forward:

-       Banks should give three months’ salary as overdraft facility to the employees of companies, which can be escrowed to the companies with a nominal rate of interest not exceeding 3%.

-       A special package should be designed for this highly skilled industry.

-       Could lend support through tax holidays and zero-interest loans for three months.

-       In the case of services sector, the government should consider contributing the employer’s share of PF for all employees earning less than Rs. 20,000 per month and ESI contribution for all employees earning below the statutory threshold level of Rs. 21,000 per month, for a period of 12 months.

-       The government should extend a government-backed loan guarantee, on the basis of which firms can raise loans on preferential terms to the extent of 25% of their existing working capital arrangements. 

-       The RBI needs to come up with a special window to provide liquidity to NBFCs and microfinance institutions in this period. 

-       Private sector hospitals need to be encouraged to provide specific number of isolation wards to the poor and extended financial assistance on soft terms.

-       Export incentive schemes like Sec. 10AA for SEZ units under the I-T Act should be extended for one more year – i.e. up to March 31, 2021. 

-       The recent Import Export Policy should be extended for one more year.

-       All export incentives viz MEIS, SCIS, EPCG license etc. should be extended for one more year. 

-       All charges including, port charges, penal charges, demurrages should be waived. 

-       All agencies viz ports, air cargo terminals, all custodians of cargo and all shipping lines have to waive penal charges.

-       The industry may be charged only on the actual consumption of electricity.

-       Immediate refund of IGST will help exporter in dealing with liquidity issues.

-       All companies should be asked to devote their CSR funds exclusively towards creation of clean quarantine centers, and addition of hospital beds, ventilators and PPEs, besides investing in testing and other facilities aimed at preventing the spread of the virus.

-       Women’s Self-Help Groups and the informal sector should be asked to produce masks, hand sanitizers, among others in a big way. 

Reference: https://www.thehindu.com/todays-paper/tp-business/the-cost-of-the-lockdown-is-pegged-at-about-120-billion/article31213162.ece


India still in local transmission: govt.


Government statement:

-       The growth graph of COVID-19 showed that India had taken 12 days to go from 100 to 1,000 cases.

-       This graph in developed countries with less population and better facilities had risen anywhere between 3,000 to 8,000 cases starting from the same line and in this 12-day initial period.

-       India is seeing this result because of early measures of isolation and lockdown.

-       India in the current phase of COVID-19 pandemic is showing local transmission and limited community transmission.

-       India is seeing “a small percentage of asymptomatic individuals”.

Reference: https://www.thehindu.com/todays-paper/india-still-in-local-transmission-govt/article31213305.ece

5,000 train coaches to turn isolation wards

Railway preparation:

-       The Railways has begun work to convert 5,000 passenger coaches into isolation wards.

-       Preparing 70 of its 125 hospitals to deal with any exigency related to COVID-19.

-       These coaches will have facilities needed for isolation based on medical guidelines, besides mosquito nets, charging points for mobile phones and laptops and space for paramedics.

-       These coaches would be prepared zone-wise.

-       Approximately 6,500 hospital beds are being made ready to meet the possible needs of patients.

Reference: https://www.thehindu.com/todays-paper/tp-national/5000-train-coaches-to-turn-isolation-wards/article31213254.ece


Bag valve masks’ pitched as alternatives to ventilators

Bag valve masks:

-       They are small devices used to deliver breathing support in emergency situations.

-       They are also known as “ambu bags”.

-       The devices could be made portable and therefore easy to use in villages and other areas without power supply.

-       The cost is so low that it can be considered a single-use device that will be given over to a single patient and never used again.

-       It needs to be manufactured, however, on an industrial scale, in millions, within a short time of a few months.

Reference: https://www.thehindu.com/todays-paper/tp-life/bag-valve-masks-pitched-as-alternatives-to-ventilators/article31213148.ece