Lockdown 2.0: Economy gets a look-in; some relief for farming, industry

New guidelines do not put any limit on production but have left the decision of opening establishments to states

The Union government, faced with the conflict between checking the pandemic and preventing the economy from skidding, has allowed business activities in a restricted manner. This has been done primarily with the intention of “rural and agricultural development and job creation”. 

Prohibition will not be entirely lifted in commercial and manufacturing but production units in rural areas, industrial estates, and export zones can reopen if workers stay on their premises or nearby.

Commercial activities in only essential services and commodities will be allowed. Cinema halls, malls, gymnasia, etc will remain closed till May 3.

The new guidelines, notified on Wednesday, do not put any limit on production but have left the decision of opening establishments to states and local administrations.

A Union home ministry order, giving the guidelines, said this was being done to mitigate the hardship of the people and select activities were being allowed from April 20 in a graded manner. 

“These activities will be operationalised by states, union territories and district administration based on strict compliance (with) the existing guidelines on lockdown measures,” said the order.

State governments can impose even stricter measures.

Since operating a unit will depend on the decision of the local government with adherence to the standard operating procedure, decision making will be more on a case-by-case basis. 

District-level bureaucrats, designated “incident commanders” and exercising the powers of executive magistrates, will be responsible for monitoring industrial, commercial, and agricultural activities, and even individuals for any lockdown violations.

While the guidelines place responsibility on owners, and violation is punishable by law, experts see them as a test for lifting the lockdown.

“It should be seen as an experiment for limited economic activity, which will not mean much in terms of revival but would help in taking stock of the situation,” Madan Sabnavis, chief economist, CARE Ratings, told Business Standard.

The transport lockdown continues till May 3, with no airline, railway, metro, bus and taxi-aggregators being allowed to operate for passenger services. Though this would prevent workforce movement, the onus of taking workers to the place of work would be on employers and incident commanders.

Sabnavis said while a lot of control was removed and this could help in addressing supply-chain issues, industry, too, would need to change. 

“Those in the automobile, chemicals and other such sectors would now start thinking in terms of providing accommodation to their employees.”

The revised consolidated guidelines also mandated strict protocols. For instance, while the information technology and IT-enabled sectors are allowed to have half their staff back, employees above 65 years and those with children below five have to be given the option of work from home. All workplaces need to have a gap of one hour between shifts and staggered lunch breaks.

According to Deepto Roy, partner, Shardul Amarchand Mangaldas, industrial premises in India are not generally suited for social distancing though units in special economic zones are better suited to implement these measures “because of regulatory requirements that require them to have controlled access and designated premises”. 

Sabnavis, however, said these units faced demand shortfall since the export market was down due to restrictions in other countries.

While the home ministry said it expected the industrial and manufacturing sectors to revive with these measures and “create job opportunities while maintaining safety protocols and social distancing”, Sabnavis was of the view that growth prospects continued to be bleak. 

“The service sector will show fall and so would most of manufacturing except those in categories like producing essential commodities like food and pharmaceuticals. Sectors like cement and steel will continue to be badly impacted.”

Prime Minister Narendra Modi, in his address to the nation on April 14, said the national lockdown would be extended till May 3. He had warned that if guidelines were not followed by monitoring agencies and other people, more stringent measures would be taken.

Face cover at workplaces and in public areas, strong hygiene and health care measures like provision of sanitizers, staggered shifts, access control, thermal screening and imposing fines for spitting etc, have been made mandatory.

The Union government also reiterated strong containment measures in hotspot districts, accounting for a large number of Covid 19 cases or with fast growth in cases. Within the hotspot districts, state governments are notifying containment zones in accordance with the detailed guidelines of the Ministry of Health and Family Welfare.

Only essential services are permitted in these zones and strict perimeter control and restrictions on movement is enforced.