The Union government’s reversal of its decision to allow e-commerce companies to deliver non-essential products raise questions about its wavering stance on the role big businesses should play, even as it takes steps to ease the lockdown during the next few weeks.
On April 15, the Ministry of Home Affairs allowed door-step delivery of “non-essential” items from April 20. But four days later, it issued revised guidelines prohibiting the sale of non-essential services. The government followed it up with another order on April 24 allowing offline stores to start selling both essential and non-essential items.
In one of the television shows, a leading industrialist who runs a major two-wheeler company said the government has informed his firm that even if a single worker tests positive for COVID-19, the entire factory will be locked down for the next three months.
Such directives from the government indicate two things: one, there is no well-thought plan on how businesses should function pre and post-lockdown and two, and more importantly, the government’s reluctance in sharing information on the current situation and its failure to engage with them due to the deep mistrust that they hold against the government.
Almost all countries and the World Health Organisation have praised India for being able to control the spread of the pandemic as the number of positive coronavirus cases are far lesser than anticipated. The government enforced the lockdown completely within days of WHO declaring the virus outbreak as a pandemic.
While the government’s decision needs to be praised whole-heartedly, it should at the same time hold meetings with various industry bodies to understand their point of view. Except perhaps urging them to donate funds to the prime minister’s fund (PM-CARES), to which most have contributed quite handsomely, there has been no formal dialogue with the industrialists, on whose shoulders rest the responsibility of turning around the economy.
Industries have on their own initiative tried helping the government fight the pandemic. They have converted their production systems to produce sanitisers, testing kits, protective gears and other equipment for health workers. One of the leading IT companies has even set up a 100-bed quarantine ward in association with a hospital while another announced a huge fund to help the patients recover faster. Another IT company has contributed ₹25 crore for the cause even though it will result in a one-time hit on its P&L (profit and loss, or income statement).
In spite of such initiatives, the government has not thought it fit to call them for a meeting to jointly find a solution for the economic recovery. For example, the government could have used the services of Amazon and Flipkart, whose last-mile connectivity encompasses 99.7 per cent of all pin codes in the country. With their help, the government could have delivered essentials, monitored coronavirus cases and even used them for several other services that it cannot provide on its own as it does not have the infrastructure to do so quickly.
By allowing these e-commerce platforms to deliver non-essential items, the government could have curtailed the rush to shop at offline stores as it might happen now. Farmers could have been encouraged to use the warehouse facilities of these companies to store their produce and get them delivered to the residents. Without such an infrastructure, farmers have started dumping them on the roads as they neither have the distribution network nor the local authorities allow them to transport their produce to other cities.
In some ways, by allowing the sale of non-essential products from these online platforms, the government could have kick-started the economy and the inventory pile up at the dealers could have been reduced. It would have also helped small sellers who make a living out of selling their wares on these platforms.
Once the lockdown is lifted, and if the government continues to restrict e-commerce platforms from delivering non-essentials, it will have to deal with several issues together. People would rush to shops to buy stuff for themselves which would lead to huge traffic snarls. Such a situation could result in a spike of coronavirus cases and the government will then be forced to shut down several parts of the country again.
With the various governments strongly in favour of extending the lockdown, some of the non-essential items will slip into the essential category, like fans, coolers, air conditioners, mobile phones, UPS, stationery goods, lighting products and several others. But by allowing nearby offline shops to open, it will certainly encourage people to come out on the streets. There is a possibility that it could then lead to the local law-enforcing agencies invoking the draconian Disaster Management Act, resulting in heavy fines and jail terms.
In order to avoid such a situation, the government should sit with the leading corporate houses and the owners of medium and small enterprises to work out a tangible solution. It will boost their morale immediately and as these are unprecedented times, none of them will want to risk taking liberties with the law.
The ruling party now has the chance to bury forever the mistrust it carries of major corporates and rope them in in its nation-rebuilding efforts.