How will national lockdown affect the Rural economy?

When the lockdown began migrant and daily wage labourers were the first to feel the impact of it. With factories, construction sites, hotels, and other services being shut down, hundreds of thousands of migrants are staring at unemployment. The Government has announced a 1.7 lakh crore package for those who will be worst affected by the lockdown, which included migrant and daily wage workers.

The government fell short on their promise of ensuring that the socio-economically backward do not get the full hit of this lockdown. A 11-year-old Dalit boy from Bihar died of hunger on the 28th of March due to the lack of ration. There have been reports of migrants who have died trying to get back to their villages. Those who would have been worst hit by the lockdown are already facing the brunt of it.

The micro-credit system and informal credit system will also take a beating as it is linked to the larger economy and thus there will be no relief for the labourers and the farmers. “Those who have not been able to return-migrate, and who are unable to earn during the lockdown, will have no funds to repatriate to their home-villages, affecting rural consumption too.” Dr. Kamath

Many migrants and daily wage labourers come from rural ares and were forced to go back to their homes due to the sudden stoppage of their income. Many migrants were forced to walk back to their hometowns, in which case they could develop serious ailments like cholera, diarrhea, and face shortage of food and water. This would mean that many would die in deaths which were not related to coronavirus. Others were sent home packed into trucks, buses, and trains in unsanitary conditions. If anyone of them were carriers of the virus, it is just a matter of time before it spreads across rural India. The Primary health care system is not in a position to handle the scale of the pandemic. According to reports, hospitals will run out of beds if even 0.03 percent of rural India was affected by the virus. This could essentially incapacitate the economy as 70 percent of the population lives in rural India. The migrants thus were not safe in the cities, with their jobs and homes being taken from them, and will be in danger even in their villages.

 “This could be an opportunity to link locally grown safe food to demand. If community kitchens procure from local farmers, both consumers and farmers can tide over COVID-19 safely. It also is a message for an alternate decentralized network of ecology-farming-food and health domains,” Seema Purshotaman

Rural India will not only see a breakdown of its already failing health care system but is already seeing a breakdown in the rural economy and agriculture system. With the migrants returning to their villages in large numbers, the pressure on the land will increase. With no buyers for the farm produce and agriculture taking a hit, the rural economy will see a massive crash.

Gauri Lankesh News spoke to Dr. Anant Kamath,  a social scientist and Assistant Professor at Azim Premji University, whose focus is on economic-sociology and technological change about how the present lockdown will impact the rural economy.

He says- If migrants are going to return to their places of origin and stay there for a couple of weeks, or even months depending on when economic conditions in urban and metropolitan India pick up, the pressure on land in those respective places of origin will increase once again. Ironically, this is why they left and came to the towns and cities in the first place.”

The micro-credit system and informal credit system will also take a beating as it is linked to the larger economy and thus there will be no relief for the labourers and the farmers. “Those who have not been able to return-migrate, and who are unable to earn during the lockdown, will have no funds to repatriate to their home-villages, affecting rural consumption too.” Dr. Kamath added.

The need of the hour is for the governments to ensure that they work on a long-term plan to revive the rural and urban economy. Small scale measures to mitigate immediate problems are not enough. As small scale measures the government has promised an increase in rations, but these figures are not enough and need to be doubled if not tripled and made free for three months. Cash grants to over 12 crore people need to be given through the Jan Dhan yojana and they should be given a minimum of 5000 rupees, which is double the current package. Janata canteens or community kitchens must be opened.

We posed concerns about the impact on the agrarian economy to Dr. Seema Purushothaman. Dr. Purshotaman is also a professor at Azim Premji University whose research focus is on the concepts and issues of sustainability, agrarian concerns from an economic point of view.

She says-  “This could be an opportunity to link locally grown safe food to demand. If community kitchens procure from local farmers, both consumers and farmers can tide over COVID-19 safely. It also is a message for an alternate decentralized network of ecology-farming-food and health domains,”

She adds further Asha workers need to be regularized, MNREGS wages need to be increased and be given to farmers and labourers, and pump resources into strengthening the Primary Health Care System.

The government has decided to divert some of their resources into the Central Vista project instead of diverting all their resources into protecting the economy from an impending crash. If this prioritization continues, India might end us seeing more people dying of hunger, starvation, and unemployment rather than of coronavirus.