India is facing its worst economic and health crisis since Independence, with the country logging in a record number of daily COVID-19 infections and an unprecedented contraction in economic activities in the first quarter of the fiscal.
According to government data, India’s GDP contracted by 23.9 per cent or nearly a fourth between April and June this year over the same months in 2019, as the country was put under the harshest lockdown anywhere in the world. The lockdown has been lifted since and economic activity has revived, but it may take months for the economy to be back on the growth path. This has meant a loss of crores of jobs in the formal as well as informal sectors, factories running at sub-optimal capacities and long term, sector specific pain.
COVID and its economic price
So it was only fitting that on the first day of the Monsoon Session of Parliament, Opposition members asked scores of questions about the state of the economy and the status of migrants – who had been forced to walk hundreds of miles in peak summer months to reach their homes due to the lockdown – and the subsequent shuttering of businesses. Questions were also asked about any plans the government may have to create fresh jobs or help the beleaguered MSME sector, which has been the worst hit. But since the Question Hour had been suspended for this Session and only unstarred questions had been allowed, no supplementary questions were possible. Unstarred questions have to be submitted by MPs in advance and they generate written replies by concerned ministries, unlike starred questions, which must be answered orally by the concerned minister.
The written questions came thick and fast, but the answers by concerned ministries either circumvented the issues or evaded direct replies. In some cases, the concerned ministry simply pointed out that no data were available so it could not possibly answer the question. In other instances, a long list of the schemes the government has already announced was annexed.
Supriya Sule of the NCP said in her address that in the current situation that while economic pain is a global phenomenon and India was not alone in going through this, “… it should be priority of government. I don’t see this government at the Centre talking extensively either about the economy or unemployment challenges. We should put it on priority”.
Here’s how the government side-stepped questions:
Vague answers to key economic concerns
To a question on whether the economy had suffered the most since Independence due to an act of God (perhaps a reference to the Finance Minister using this term to express the government’s inability to provide GST compensation to states), Minister of State for Finance and Corporate Affairs Anurag Thakur merely quoted official GDP contraction figures for Q1 besides quoting the GST collections for the quarter. On what the government has done so far to boost economic growth, Thakur listed out relief measures such as in-kind (food; cooking gas) and cash transfers to senior citizens, widows, disabled, women Jan Dhan Account holders and farmers. He also mentioned insurance cover for workers in the healthcare sector and wage increase for MGNREGA workers besides support for building and construction workers and employment provision for migrant workers under the Pradhan Mantri Garib Kalyan Rojgar Abhiyaan.
To another question on how India’s external trade was impacted due to COVID-19, Thakur said India, “like other nations in the world” imposed a strict lockdown from March 25 to combat the spread of COVID-19 and to strengthen health infrastructure. He said from May onwards, the government has initiated the ‘unlocking’ process and that its positive impact on the economy was seen in high frequency indicators of July and August.
Another question elicited the already well-known details of the ₹20 lakh crore stimulus package announced by the government.
No idea of migrant crisis
Asked if the government was aware how many migrant workers lost their lives while returning home during the lockdown, Minister of State for Labour and Employment Santosh Kumar Gangwar said “no such data is maintained”. And when subsequently the MPs wanted to know whether the government has provided any compensation/economic assistance to the victims’ family, Gangwar said such a question did not arise in view of the previous answer. This, after acknowledging that nearly 1.05 crore people returned to their home states during the nationwide lockdown. The minister also said over 63 lakh migrants workers were transported back home by train. In reply to another question, he spoke of the scheme ‘One Nation, One Ration Card’ to offer food security to migrants, without mentioning that the scheme has already missed its initial completion target.
Lack of plans to address unemployment
Gangwar quoted old data from the Periodic Labour Force Survey, to answer a question on unemployment: 5.18 per cent for 2018-19, thus making it impossible to fathom the level of unemployment since. He also mentioned the ‘Atmnirbhar Bharat’ initiative and the possibility of the ₹20 lakh crore stimulus package creating jobs, without giving any specifics.
To questions over unorganised sector labour being the worst affected due to the lockdown, migration of such workers back to hometowns and details of any assistance the government has given to states to rehabilitate such workers, Gangwar again quoted myriad government schemes. He referred to the advisory guidelines issued by the Centre on August 27 while also mentioning older schemes.
State of MSMEs
There were several questions over what help the government has extended to the Micro, Small and Medium Enterprises (MSME) sector, the worst affected sector due to record economic contraction. But Minister Nitin Gadkari said neither has there been any “formal research” on the impact of COVID-19 on the MSME sector nor is there data on the total number of jobs lost in the sector. He spoke of a Credit Guarantee Fund Trust, already operational, for extending collateral free credit up to ₹2 crore to MSMEs. The credit under this scheme jumped by about 50 per cent between FY 19 and FY20, from ₹30,168 crore to ₹45,851 crore, before slowing considerably after the lockdown. In the first five months of the current fiscal, credit offtake has been just ₹13,389 crore. Now, the government had announced two new credit guarantee schemes for the sector: Emergency Credit Line Guarantee Scheme and Credit Guarantee Scheme for Sub-ordinate Debt (CGSSD). In reply to another question, the minister said that pending dues as a result of government procurement from MSMEs had reached close to ₹1,000 crore by the end of July.