THIRUVANANTHAPURAM: Both the state and Central governments need to intervene and help traders, entrepreneurs and labourers who are facing an unprecedented economic crisis owing to Covid and lockdown.
The interventions can range from offering moratorium on repayment of loans availed by the affected to ensuring a direct money transfer programme for at least six months, suggest experts. In the past 45 days alone, 20 people died by suicide in the state, citing acute financial crisis caused by lockdown.
“Problems faced by small businesses and traders during the lockdown are a consequence of the economic slowdown that has engulfed the national economy itself. No state in India has been immune to this difficulty. Much of the present economic difficulties faced by small businesses and small traders are owing to their inability to repay the loans taken from banks. The Union government and the RBI are in charge of modifying the specifications of regulatory forbearance to help small players in the economy and bring relief to them,” said R Ramakumar, State Planning Board member, and professor, Centre for Developing Economies, Tata Institute of Social Sciences, Mumbai.
He said the state government can help these businesses and traders by giving them specific exemptions from paying certain taxes or utility bills. “The economic relief package announced by the government in March last year as well as the one announced last week addresses this question with some extent of comprehensiveness. I am sure more relief measures will be examined and announced in the days to come,” he said.
Economist and former chairman of state finance commission B A Prakash also called for steps to give relief in loan repayment for he affected. “Analysing the recent suicides, we can see that an important cause of the suicides is the issue related to repayment of money borrowed from commercial banks, non-banking financial institutions (NBFI) and money lenders. The government should intervene to extend the repayment period of all loans due for repayment for another year. Forcing immediate repayment of the loan by lenders should be treated as crime,” said Prakash.
He also suggested that the state government should launch an immediate enumeration of private secondary and tertiary sector units to study the current working status, loss in production and employment and problems faced. “The units belonging to industry, trade, repair of motor vehicles, transportation and storage, hotels and restaurants, tourism, IT, education, arts, entertainment and recreation and other services are to be studied. Based on the enumeration, a revival package shall be formulated and implemented to revive the units in each sector,” said Prakash. Technocrat and planning board former member G Vijayaraghavan said the immediate step should be to ensure direct money transfer to all in distress.
“Low income group and lower middle income group people are the worst hit. The pseudo ego of Keralites prevents them from speaking about the crisis in open. That is why suicides are increasing. A payment of `5,000 per month to all affected by lockdown for a few months till the crisis is over will be ideal,” he said.Vijayaraghavan said this can even be conceived as a repayable advance. “If the government doesn’t have fund, give this as an interest-free loan so that they can pay back in equal instalments once the situation improves. Another option is to use the funds of welfare fund boards of various sectors to pay this money,” he said.
According to Prakash, the government can mobilise money for paying monthly allowance to all whose livelihoods were affected by drastically cutting the plan size of the state and that of the 1,200 local bodies for the current fiscal. “This is an unprecedented crisis. So, the government need not hesitate to put on hold major infrastructure projects planned and by deferring salary hike for government and public sector employees. Crores of rupees can also be saved by abolishing non-functional establishments and offices of government and public sector,” he suggested. Vijayaraghavan suggested merging of various welfare boards as a single unit for more efficiency in managing dole-outs and also for saving government money.
Tony Thomas, Chief Digital and Information Officer of Signify, said there are no shortcuts and the only thing the government needs to do is to remove the fear and allow functioning of all sectors with minimal, reasonable restrictions so as not to cause unnecessary crowding. “There is no logic in shutting down any establishment. Our citizens are responsible and the administration needs to respect that fact and allow them to work at their pace. This will solve most of the issues,” he said.
On the question of pandemic-induced casualties versus those triggered by loss of livelihood, Tony said burden of disease should be the only criterion that needs to be considered in such scenarios. “We have the statistics at hand that total number of deaths in Kerala in 2020 is less than the previous year. It is a proven fact that this disease hadn’t increased the number of deaths in the state, even if we discounted factors such as reduction in accident deaths owing to lockdown. On the other hand, people of young and productive ages are killing themselves after being denied their legitimate right to work. That is a trend that we need to arrest immediately. Kerala has sufficient healthcare capacity and can effectively manage any spike. We just need to scientifically manage that,” he said.