The economic and human impact of the coronavirus pandemic has been unprecedented. To curb the spread of the Covid-19 outbreak, India has been in a lockdown since March 25. As majority of economic activity and business operations came to a halt, job losses were evident across the country, resulting in falling incomes and loss of livelihoods.

Thus, as the government prepares for a graded exit from the lockdown, protecting the workforce and their livelihoods by curbing the rising unemployment has to be accorded utmost priority as this will play a critical role in our economic recovery.

As business activity resumes, the government and the industry need to come together to work on some key aspects, such as health safety and precautionary measures, among others, to create a conducive work environment and encourage greater employment in the economy.

Labour shortage
While business operations for some essential services such as hospitals, pharmacies and food supplies continued through the lockdown and gradually resumed in other sectors such as construction and manufacturing, all sectors continue to face considerable labour shortage.

Migrant workers residing in shelter homes or available locally near the industrial belts may be mapped and deployed to the nearest factories. This,in turn,will ensure that workers do not need to travel far from their homes and will help to restore incomes.

Such a strategy will require coordinated action from both central and state governments along with trade unions. State governments would be responsible for the mobilisation of workers along with the local district administration for facilitating movement of migrant workers, while ensuring their accommodation, commute, food and other basic needs.

As businesses are hit with declining revenues, to reduce the financial burden of organisations, the ministry of labour and employment may consider the extension of provident fund contribution date from the current 30 days to 60 days for the months of March, April and May.

While the EPFO has extended the date to May 15, 2020, it is suggested that this be further extended for a period of 30 days, given the extension of the lockdown period and the delays in resumption of revenue generating activities.

Additionally, it is recommended that the government could contribute 3.25 per cent of the employers’ and 0.75 per cent of the employees’ share of monthly ESIC contributions for the next three months, or relax the contributions, for three months. This will enable industries to sustain their business activities by maintaining cash flows.

We have also requested for the extension of the benefits under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) to more establishments, which, at present, has a very limited impact as it is only eligible for establishments employing up to 100 employees, with 90 per cent of the employees earning wages less than Rs 15,000 per month.

It is recommended that the scheme be extended for an organisation having 50-60 per cent of the workforce earning up to Rs 25,000 per month. This will expand the benefits of the scheme to others, specifically the MSMEs.

Scheme rethought
During the lockdown, the government had issued various labour advisories under the Disaster Management Act, such as prohibiting employers from any wage reduction, layoffs and retrenchment of workers etc.
​
With private establishments now permitted to resume operations, it is requested that the applicability of the said Act be removed for industry while labour laws take precedence. The temporary relaxations and relief measures announced by the government should continue to be available for the employers for them to resume and sustain business operations.

A related suggestion is the further review of labour codes, in line with the government’s initiative towards greater simplification and rationalisation of various labour laws through codification, with a view to enable greater ease of doing business and encourage entrepreneurship.

To encourage workers to come back to work, it is suggested that EPFO and ESIC take up massive campaigns and draw up a communication strategy for informing workers to re-join workplaces. A circular/guideline may be issued from the ministry to direct workers to join work or otherwise be subject to action taken.

The government may also consider restarting the Pradhan Mantri RojgarPrasthan Yojana to encourage organisations to retain job offers and promote fresh employment. The scheme has dual benefits of providing social security to workers and encouraging employment by incentivising employers to hire new workers.

With only 33 per cent of the labour force allowed to work to ensure social distancing, productivity of enterprises might be adversely impacted. It is, therefore, suggested that normal working hours of employees across sectors may be increased by four hours every day. Workers would be paid in proportion to the normal wages for working overtime and workers’ consent must be taken for the same.

Recommendations related to health and workplace safety include availability of industry specific standard operating procedures on websites, redesigning entire supply chain process for preventing the spread of the virus, and ensuring availability of resources for maintaining quality of personal protective equipment (PPE)/sanitisation for MSMEs, among others.

Job retention
To allow commercial establishments in the services sector to retain maximum workforce, it is requested that the provisions of layoff under the Industrial Dispute Act be extended as a job retention measure for workers having no work. This will allow such workers to continue to be on the company payroll during the layoff period at reduced wages while getting access to statutory benefits such as ESIC and PF.

With all enterprises facing worker shortages while workers too face job losses, a combined effort alone can best arrest the ravages of the Coronavirus on the economy.
​
This article was first published in The Telegraph on May 11, 2020

​The world is grappling with the COVID-19 outbreak. The conundrum, however, has been safeguarding lives while ensuring economic balance. The manufacturing units, supply-value chains, MSMEs, the hospitality sector, and other critical sectors are struggling to find a strong ground to recuperate from the huge economic loss the outbreak has brought.  By the end of the third phase of the lockdown, we would have lost almost two months of industrial output, roughly equivalent to 8% of GDP a month. Therefore, the industry, especially the MSMEs, workers, and people from the lowest strata of the society are in dire need of a substantive and immediate stimulus package from the government.

MSMEs are the backbone of the Indian economy and are the worst-hit sectors. CII recommends a credit protection scheme for MSMEs, whereby 60-70% of the loan should be guaranteed by the government i.e. if the borrower defaults, the government should repay the bank up to the amount it has guaranteed, so the risk to the lender is limited. The allocation for this guarantee can be kept at Rs 2 lakh crore, though this may not entirely be utilised. MSMEs also are suffering because of the delayed payments, which are in the range of Rs 6 lakh crore. The outstanding payments should be made on an urgent basis to help MSMEs sail through the crisis.

CII has also suggested the creation of a fund or SPV with a corpus of Rs 1.4-1.6 lakh Crore, which will subscribe to NCDs/Bonds of corporates rated A and above. The fund can be seeded by the Government contributing a corpus of Rs 50,000 crore, with further investments of Rs 40,000-50,000 crore from banks and the remaining Rs 50,000-60,000 crore by financial institutions. This will provide adequate liquidity to the industry, particularly the stressed sectors such as aviation, tourism, and hospitality.
​
Building public infrastructure could boost demand and create jobs. Rs 4 Lakh Crore could be demarcated for the purpose wherein private investors and investment funds could be roped-in to increase the size of the investment. To begin with, the fund could be utilised for pending projects that would immediately enhance productivity.
​
CII has sought an allocation of Rs 2 lakh crore to be earmarked for bailing out state-run electricity distribution companies that have been accumulating losses. The banks are also at a higher risk of running into an economic crisis as  their current exposure to the private sector, including MSMEs, stands at Rs 29.05 lakh crore. Therefore, CII has recommended for recapitalising the banks with an allocation of Rs 2 lakh crores to manage any surge in NPAs.

With jobs intact, the spending capacity and demand will also remain intact. In addition, the government must boost spending on infrastructure and MGNREGA

Usually economic growth drives job growth, as jobs and livelihoods are an outcome of economic activity. I believe that the Covid pandemic which has brought economies to a virtual standstill, with jobs and livelihoods amongst its many victims, has turned this equation on its head. Investing in saving jobs and livelihoods now, can be a good insurance policy for our ability to put the country back on a high growth trajectory, quickly.
As India comes out of the lockdown, and economic activity resumes, an important part of the recovery process would be to have consumers available for the goods and services produced. This is possible only if jobs and livelihoods are preserved in the interim recovery period of 3-6 months. With jobs intact, the spending capacity remains intact and so does the demand, speeding up the economic recovery.

The government has a key role to play here. It must come forward and provide wage support to enterprises to mitigate job losses. CII suggests that banks provide additional working capital limits, equivalent to April-June wage bill of the borrowers, backed by a government guarantee, at 4-5 per cent, with a refinance guarantee from the RBI, to all enterprises.

In addition, MSMEs could be extended wage support through ESIC as well. Utilising the ESIC funds under Rajiv Gandhi Shramik Kalyan Yojana and Atal Beemit Vyakti Kalyan Yojana a corpus could be created to provide additional liquidity to MSMEs for meeting their wage liabilities.

Generating employment
Higher government spending on infrastructure is another important step for generating employment, especially in the unorganised sector, through construction activity. The National Infrastructure Pipeline, with projects worth ₹102 lakh crore, to be completed over five years starting FY20, should be front-loaded. The higher spending could be met by increasing the fiscal deficit by a margin of 0.25-0.5 per cent, as infrastructure is a productivity enhancing expenditure, and has an overall multiplier effect on the economy.

Construction sector is the second largest employer after agriculture. Out of a total estimated workforce of 500 million, about 60 million is estimated to be in the construction sector. It would be safe to assume that 90-95 per cent of these would be migrant workforce from rural areas in informal employment. Building infrastructure will recreate many of the jobs lost to the aftermath of the Covid lockdown, in this sector.

Greater expenditure on MGNREGA could be another tool to generate employment in the immediate term. CII suggests an additional spending of ₹6,000 crore, about 10 per cent of the FY21 Budget, on MGNREGA, over and above the increase in expenditure due to increase in MGNREGA wages under the Pradhan Mantri Garib Kalyan Yojana.

Labour reforms
The Prime Minister has been emphasising on reforms to enable India to leverage the opportunities that a post-Covid world is likely to present, especially in the manufacturing and export sectors. As India prepares to pitch for attracting large foreign investments, it is important to focus on labour reforms. The issue of jobs and employment, is no stranger to India. Labour reforms will help unlock the employment generating potential of Indian industry.

In additional to the traditional approach to labour reforms, Covid-19 has highlighted the importance of a few other dimensions of labour engagement that need attention.

One of the key challenges that industry is facing is that of getting the migrant workers back to work. It is both an issue of the willingness of the workers to come back and the logistics issues involved. Pandemics can strike in future too. There could be a second wave of Covid itself.

Housing, skill mapping
A long-term solution could be to create worker housing and other amenities in and around India’s industrial clusters to minimise the disruptions to the industrial activity. Some of this can be created through public-private partnership and some by the Central and State governments as part of their plans for creating industrial infrastructure.

A skill-mapping study of the returning migrant workforce can be conducted to try and place them within the States itself. In fact, skill development should become an integral part of the planning for economic growth and attracting investments so as to ensure that as much skills as possible are available to industry locally. Industry may also have to look at locating closer to where the workforce is, for their fresh investments.

Workers at their end should be willing to invest time and effort in upgrading their skills, to be able to meet industry’s demand for better skills and higher productivity.
​
This article was first published in The Hindu BusinessLine on May 06, 2020

Confederation of Indian Industry (CII) poll of about 100 CEOs conducted on May 4 has revealed that most of them expect the economy to contract this year. As per an earlier poll, one-third of firms expect their revenues to contract more than 40% this year. Almost half of those surveyed felt that it would take more than a year to achieve economic normalcy post-lockdown.

GoI’s May 1 decision to extend lockdown from May 4 by two more weeks, with further relaxations in places, is welcome, as it provides for a safe and calibrated opening of the economy while also containing Covid-19’s spread. This also allows governments both at the Centre and states additional time to build necessary medical capacity required, in case there is a spike in the number of Covid-19 cases. Under the new guidelines, all industrial activities in rural areas are permitted, while it is restricted in urban areas to specified areas like industrial estates, special economic zones (SEZs), export oriented units (EOUs) and industrial townships with access to control.

GoI has also divided districts into red, orange and green zones. Economic activities in red, and especially containment, zones continue to be restricted.
​
The guidelines leave out large segments of economic activities not located in industrial sectors. As a result, this does not cover many business units, including MSMEs, belonging to unorganised sectors.

Providing financial stability to these business units is of critical importance. A focused strategy needed to minimise the adverse impacts of the lockdown without compromising the efforts to restrict the contagion.

The exit strategy should focus on districts with heavy presence of industrial and economic activities, or industrial clusters. The top 100-150 industrial districts could be identified and classified, based on their contribution to the national economy, presence of industrial clusters, and number of registered enterprises.

Second, the focus should be on restarting all economic activities in all parts of an economic district — including in containment zones — with all necessary safety measures in place. The classification of zones into containment zones, orange zones and green zones could be done on the basis of safety precautions required. These zones could be marked in terms of concentric circles around the hotspot.

Identified industrial districts would require a separate working protocol and monitoring mechanism for business operations under various zones. Guidelines pertaining to movement of people and vehicles, sanitisation procedures, door-to-door testing, health and social distancing protocols, etc, should be strictly followed in containment zones.

Given the economic significance of these industrial districts, more should be spent in taking measures to contain the spread of Covid-19 — e.g., free distribution of personal protective equipment (PPE), masks, close monitoring, etc. The benefits from the resumption of economic activities in such districts will hopefully outweigh the additional costs incurred on protective measures for containing the pandemic.

Third, all business activities — essential or non-essential, within specified industrial zones or outside of them — should be restarted in urban areas. Standalone facilities or industrial clusters that are not notified should be permitted to open up at the earliest. This would also enable supply chains to operate smoothly across the country.

Real-time availability of data on all types of zones within industrial districts can help businesses plan better. It is also important to permit public transport for workers and self-employed people with requisite precautions, so that they can travel to work. Standard operating procedures for workplaces and establishments in case of Covid-positive cases are available to avert a start-and-stop situation.

Focusing on the reviving industrial districts may reduce potential loss of industrial activity by around 50%. This, in turn, could provide relief to the national economy, along with providing financial sustainability to business units, preserving livelihoods and bringing relief to all workers.
​
 This article was first published in The Economic Times on May 04, 2020

​The humankind is currently witnessing the disastrous effect of COVID-19 on the socio-economic balance of the world. It has toppled economic growth and has risked the lives of millions. The tradeoff between the health of masses and industrial activities has been detrimental to the economy. While no respite seems plausible in the coming months, economists, industrialists are dealing with the challenging task of demand creation, above all, economic revival.

​About two-thirds of the respondents expect revenues to fall more than 40 per cent in the April-June 2020 quarter, while for FY21, the expectations of a fall in revenue are staggered, with 33 per cent of the firms anticipating a revenue fall of more than 40 per cent, closely followed by 32 per cent of firms expecting a revenue contraction ranging between 20 per cent to 40 per cent.

​The poll also tried to identify key constraints faced by the businesses. Nearly 75 per cent of the respondents identified the complete shutdown of the operations as the major constraint, followed by 53.1 per cent for lack of demand for products. 

​45 per cent of the respondents felt that it would take more than a year to bring back the economy on track, while 34 per cent expected their own company to recover in 6-12 months timeframe. 

​Boosting demand in current circumstances is a major challenge before the country. Nearly 37 per cent of the respondents believe the domestic demand to hit normalcy in 6-12 months, while the same confidence for export orders is sluggish, with 41 per cent expecting it to take more than a year to recover.

​Securing livelihoods is the prime concern for the country. More than half of the CEOs anticipate job losses in their respective sectors, post lockdown, with nearly 45 per cent expecting 15-30 per cent job cuts. 

In a sign of relief for employees, two-thirds of the respondents have not experienced a salary/wage cut in their firms, while nearly 49 per cent of the firms who have witnessed a wage cut said the period of wage cut is ‘undecided.’

There is a need to do a qualitative and quantitative impact analysis of the mitigation efforts to assess the viable economic scenario. CII has suggested a regular review of hotspots to barricade the containment zone and carry-on with the operations in the rest of the area. Bringing back the migrant workers to the manufacturing hubs is also key to reviving industrial processes, which must be coupled with demand creation. CII has been working with the government to bring back the economy on-track and protect the sustenance of millions.
Click here for the CII CEO Snap Poll
​

Within services, the majority of trade, transportation and hospitality remains closed, while financial, IT and government services remain partially operational. Even in the power sector, which is permitted to operate, significant reduction in demand owing to lockdown is having an adverse impact.

The chance of a significant revival in investment activity is unlikely since capacity utilization levels may remain suboptimal. Consumption demand is also not likely to pick up noticeably since people’s incomes have been impacted.
​
​On the external front, as economies across the globe continue to struggle with the pandemic, global trade may decline by 13 to 32 per cent in 2020, as estimated by the World Trade Organisation.

This will lead to disruption in supply chains, slow pick-up in investment activity, labour shortages in the short-run and muted consumption demand on account of reduced household incomes.
​
​In the optimistic scenario, which envisages a faster pick-up post the lockdown period, GDP is forecasted to register a growth of 1.5 per cent in the best case. 

CII has also suggested additional working capital limits to be provided by banks, equivalent to April-June wage bill of the borrowers, backed by a Government guarantee, at 4-5% interest.

In addition, the CII paper has suggested the creation of a fund or SPV with a corpus of Rs 1.5 lakh crore which will subscribe to NCDs/Bonds of corporates rated A and above. The fund can be seeded by the Government contributing a corpus of Rs 10,000-20,000 crore, with further investments from banks and financial institutions such as LIC, PFC, EPF, NIIF, IIFCL et al. This will limit Government exposure while providing adequate liquidity to industry. 

With these measures in place, it is hoped that decline in the GDP growth rate would be contained.
 
Click here to read the CII Report on – A Plan for Economic Recovery

The guidelines issued by the Government on relaxation of lockdown after 20th April within the parameters of safety precautions have brought relief to industry as well as workers and farmers. CII has suggested continued stringent lockdown in specified containment zones with rest of the identified hotspot districts to be open to economic activities with adequate safety measures.

CII has submitted detailed recommendations to the Government based on inputs received from industry members across the country. It has called for action on 5 key areas in advance of the implementation of the guidelines on 20 April. CII hopes that states would issue guidelines in accordance with those recommended by Ministry of Home Affairs and not take stricter measures.

One, red zone districts and containment zones need to be clearly identified and demarcated and industrial activities should be permitted in non-containment zones of red zone districts, if found safe. A list of red districts and containment zones may be published on a real-time basis for information of industry.

CII members have also pointed out that the Government needs to clarify that industrial operations permitted during the lockdown for essential items would continue to be permitted and that no further separate notifications from central/state government are required for their operations after 20 April.

Two, certain activities related to the sectors that have been opened up would also need to be permitted to ensure that operations continue smoothly. For example, automotive value chain including OEMs, components, retail and service workshops must also be included in the list of permitted industries. Agricultural inputs of fertilizers, pesticides and seeds have been opened up, and there is need to also relax rules for production of necessary equipment.

Similarly, equipment and services for generation, transmission and distribution of power, including renewable energy such as gear boxes and generators may be allowed to function.

Three, shifts, transportation and stay of workers, social distancing and strength of workforce needs greater clarity and redefinition in some cases. Two shifts may be permitted for industries allowed to function, especially for essential items. In continuous operation plants, it is not possible to have a 1-hour gap between shifts and instead workers may start work on a staggered basis.

Stay of workers in large factories within the premises may not be possible to arrange at short notice and nearby facilities should be allowed to be used. Further, personal vehicles of employees in all industries opened up may be permitted to ply during the lockdown.

The guidelines have suggested 50% of workforce to operate to begin with in plantations and IT and IT enabled Services. This could be done on a self-certification basis. Moreover, in certain cases, if adequate social distancing norms are maintained, then more than 50% strength could be permitted.

Four, model guidelines should be notified for industrial areas, MSMEs, rural areas, etc. The list of industries and industrial establishments allowed to operate needs clarification in certain cases. For example, units manufacturing for exports but not in SEZ or Export Oriented Units category should be allowed to operate.

Finally, larger manufacturing plants should not be subject to complete closure on detection of a Covid-19 positive case in one part of the plant. A detailed protocol should be followed in case of such eventuality to identify and isolate contact persons.

​The lockdown in India starting March 25 brought almost all economic activity in India to a halt. A step necessary to save lives, it, however, put a question mark before the livelihoods for millions of Indians, especially those at the bottom of the pyramid such as migrant labour.

As the economic crisis grew, the need to re-start the economy to save millions of lives in the long-term was acutely felt in many quarters, and CII submitted recommendations to restart the economy in a safe and calibrated way, taking into consideration the geographic spread of COVID-19.

Taking cognizance of the situation, on 14 April, Prime Minister Narendra Modi announced an extension to the lockdown till 3 May 2020 but with a caveat: post 20 April, partial opening of the economy was permitted.
​
The Ministry of Home Affairs subsequently released detailed guidelines stating the select activities permitted, subject to their not being in designated ‘containment’ zones within hotspots; any new area in the containment zone would warrant suspension of activities previously permitted in that zone, and a withdrawal of permission in case of violation of lockdown measures, risking the spread of COVID-19. 

​This move was welcomed by industry and seen as a pragmatic step in the right direction as it struck a fine balance between safety and economic sustenance.
The guidelines, to be operationalised by State Governments keeping in view ground realities, permitted opening of sectors and activities, with details specified under each, such as  health services, agriculture and related activities, financial sector, social sector, online teaching, MNERGA works, public utilities, movement including loading/unloading of cargo and goods, supply of essential goods, and commercial and private establishments. 

As the lockdown in India has been extended till 3 May 2020 to prevent the spread of Coronavirus, the need for relief and rehabilitation has increased as millions find themselves stranded and unable to earn their daily living. Specially affected are migrant labour, dependents, and people from weak socio-economic backgrounds.

CII has undertaken various initiatives over the years related to disaster relief and management. As millions of Indians get impacted due to Coronavirus, CII, along with the CII Foundation, Young Indians (Yi) and associate associations SIAM and ACMA is undertaking extensive relief and rehabilitation operations.
​
As on April 13, 2020, CII is working across 27 states in India such as Jammu and Kashmir in the north, Gujarat in the west, Nagaland in the east and Tamil Nadu in the south, covering a wide expanse of the country. Targeting vulnerable sections of society, CII has so far reached out to more than 2.5 million beneficiaries.  
Key initiatives taken include:

1. Distribution of hygiene material

33 lakh hygiene materials including 5 lakh masks, 6 lakh gloves, 8 thousand PPEs and 21.75 lakh sanitizers/soaps have been distributed among the vulnerable population, policemen and medical workers.
​​
2. Provision of food

9 lakh cooked meals, and 4.25 lakh ration kits and 500MT of food grains have been provided to the needy such as daily wage labourers, migrant workers, farmers, the elderly, nomadic tribes, children and women workers.
​
 3. Community Kitchens

​CII has supported numerous community kitchens in cities such as Delhi, Bhopal, Rajkot, Bhilai, Jamshedpur, Dhanbad, Patna, Cuttack, Kalinganagar, Ernakulam, Jaipur, Hyderabad, Noida, Guwahati, Asansol, Jamshedpur, Durg, Udaipur, Dehradun, Lucknow, Bareilly, Hubballi and Vizag.
​
4. Installation of Disinfection Tunnels

In places such as markets and bus stands, where typically large numbers of people gather, disinfection tunnels have been installed by CII and Young Indians (Yi) to minimise the chances of spread of the virus.
​
5. Awareness Drives

The CII Foundation has undertaken awareness drives and relief work in 115 villages in 6 districts in Punjab and Haryana, while the CII Foundation Woman Exemplar Network has created awareness and distributed ration kits to marginalised communities in UP, Rajasthan, West Bengal and Maharashtra.

6. Special Helpline for the disabled, single and widowed women
The CII Indian Women Network has launched a special helpline in Puducherry and helped over 200 individuals with their problems so far.
​
In addition to the above ongoing activities, CII is working in close collaboration with State Governments, government offices, hospitals and police departments to undertake health and welfare interventions, in states such as  Delhi, West Bengal, Punjab, Telangana, Tamil Nadu, Himachal Pradesh, Karnataka, Chhattisgarh, Maharashtra, Gujarat, and states of North East India.

For more details on CII Covid-19 relief and rehabilitation, and to contribute to the CII Covid Relief Fund, visit https://www.ciicovid19update.in/.
​
​A time of crisis is a time for everyone to rally together to emerge from the crisis. Corporate India is stepping up to the task, and as India’s leading industry body, CII is spearheading relief and rehabilitation measures to mitigate suffering and losses across the country.