Government Initiative for Saving Our Lives And Livelihoods

An important step towards resumption of normal economic activity has been initiated by the government amid the ongoing pandemic. India has taken a calculated move of lifting restrictions from manufacturing, construction and transportation of goods from April 20 onwards, which would function adhering to the Ministry of Home Affairs issued detailed guidelines on the subject.

Almost 80% of the country’s export units which are located in SEZ or special economic zones, export-oriented units (EOUs) along with industrial townships and clusters would be able to resume some form of activities. Moreover, independent service providers like self-employed electricians, IT repair personnel, plumbers, motor mechanics and carpenters will also be allowed to resume work, educational institutions, coaching centers, domestic, international air travel, train services will remain suspended. Therefore while industries, in general, would get some relief, restrictions would continue unabated to fight Covid-19.

Welcoming the move Kishan Jain, Director at Goldmedal Electricals said, “We are seeing COVID-19 having a major impact both in India and globally, with organizations across industry sectors being affected by the lockdown. However, with the government releasing the latest MHA guidelines which allow the measured commencement of work at certain manufacturing and industrial establishments, this has come as much-needed relief to the sector. We are glad that the government is taking the necessary steps to support Indian manufacturing businesses, which will also come as a relief to daily wage workers. Also, with electricians being an important stakeholder for Goldmedal Electricals, the initiative was taken by the government in allowing them to commence necessary repair work is a commendable move. All these steps will help cushion the impact that the COVID-19 pandemic has had on the MSME sector at large.” 

The government has divided the country into new zones. The ministry of health and family affairs has slotted 170 districts which were hotspots with highest incidences of coronavirus infections into the “Red Zone”, with some cases into the “Yellow Zone” and 359 districts into “Green zone” where no cases have been reported in last 28 days. The new permitted activities would only be permitted in these green zones, subject to permissions granted from state or district administration.

Besides allowing construction activity in rural areas and in areas outside the city and municipal limits including those under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), food processing units located in rural areas have also been allowed to resume work.  Government has lifted restrictions from all agriculture, horticulture and fisheries-related work. All cargo movement through road, rail or even air, which would include loading and unloading activities at major ports, has been allowed. With highway dhabas and restaurants being permitted to remain open truck drivers would continue ferrying goods without worry. These thoughtful decisions would definitely impact the livelihood and income of the rural workers which would provide a huge fillip to the rural economy.

While approximately 400 units in SEZs which were part of essential commodity sectors such as pharmaceuticals and power has remained active throughout the lockdown, the information technology sector remained functional by letting their employees work from home.

Expressing his satisfaction on this move Neelesh Kripalani, Senior Vice President and Head, Center of Excellence (CoE) at Clover Infotech, said, “The Novel Coronavirus (COVID-19) has affected almost every country in the world and India is no exception. To control the spread, the Indian government has imposed a mandatory countrywide lockdown. It will definitely impact businesses. As per the Investment Information and Credit Rating Agency (ICRA), the Indian economy is likely to witness a sharp contraction of 4.5% (de-growth) during Q4 FY20 and is expected to recover gradually, to post a GDP growth of just 2% in FY21.

This lockdown has brought in the fundamental shift in the mindset of companies with placing more focus on digitally transforming the workplace and building ‘Virtual Workplace’ culture. Due to the social distancing and lockdown being witnessed in almost all countries of the world, the demand for moving the business-critical workload to the cloud is on the rise. Workloads on the cloud can be easily accessed and managed across the organization. This gives employees the flexibility to work from anywhere, anytime.

This is an apt time for businesses to move their application and the underlying infrastructure to the cloud and reap the benefits of increased speed, efficiency and agility. This gives businesses the assurance that their core application and operations are functioning seamlessly. It also increases the cohesiveness among various functions within organizations. I believe it is a great step by the government to extend the lockdown to control the Coronavirus (COVID-19). I am sure the government, the health professionals and administration is doing a great job to contain the spread and we must adhere to the government’s mandate in terms of extension if any.”

As of now, India boasts of 232 SEZs comprising of almost 6,000 units, wherein the dedicated development commissioners of every SEZs have initiated discussions with the industry to analyze the feasibility of transportation, logistics and use of labour in a staggered manner. Meanwhile, almost 85% of export units dealing in, pharmaceuticals, electronics and chemicals, are likely to become operational. Since SEZs and EOUs provide direct employment to more than 25 lakh people and contributing Rs 7.87 lakh crore to India’s export basket, which amounts to a whopping one-third of total national exports, the move is likely to provide some support to the quickly crumbling economy.
 

Praising the government efforts, Parag Naik, Co-Founder and CEO, Saankhya Labs has also suggested that, “The first priority should be to ramp up investments in the telecom and electronic equipment industry. We should not just look at investments from MNCs, however, the government should focus on making policies that encourage local SMEs and MSMEs to ramp up investments. This can be done by incentivizing these companies to build a local ecosystem. Instead of spending money on loss-making PSUs, the government can divert those funds towards supporting next-gen Indian companies which have the capability to take on the world. While ‘Make in India’ is a good initiative, it should be ramped up to focus more on the electronics industry. The government should offer more sops to Indian manufacturers to set up and scale-up facilities. Apart from the setting up of factories and manufacturing units, the need of the hour is to invest in innovation. Countries like China and the US dominate the market because they have a large bank of IPs. If India has to compete on a global scale, we have to ramp up domestic innovation. We have a great demographic dividend and we can certainly use it to innovate and build an IPR regime.” 

Meanwhile, moving ahead on the path of economic revival, the government has made it clear that the government would allow, production being carried out at coal mines, oil and gas sites, refineries and other units which require a continuous process. Besides this manufacture of IT hardware is permitted while IT and IT services companies are allowed to resume work with only 50% strength. Work by e-commerce firms and vehicles used by such firms have been allowed to ply. Courier services have also been allowed to operate.

Hailing this government initiative, Bhavin Turakhia, Founder & CEO, Flock and CEO & Co-founder, Zeta said, “We welcome the new MHA guidelines announced by the government today that state that IT and IT enabled services will be allowed to function at 50% strength as well as the permission granted for the production of IT related hardware. Today, India’s IT and startup sectors are experiencing tough times due to the COVID-19 pandemic, which is seen disrupting the progress and future potential of this highly promising sector. Some other measures which the Government should consider include the suspension of Section 7, 9 and 10 of the IBC [Insolvency and Bankruptcy Code] for a period of six months if the lockdown extends beyond 30th April. If implemented, this will surely bring some relief to many young IT startups and help them sustain their business. Other measures include the easing of compliance and filing guidelines for startups by eradicating the current penal provisions while offering financial tools to help them overcome this eventuality. With COVID-19 cases increasing by the day, and reports coming in that the government might extend the lockdown by a couple of weeks, this is likely to further impact the economy with Indian entrepreneurs bearing the brunt of this uncertainty. We are confident that the government will take all of this into account and consider taking further steps to ensure the startup ecosystem is able to tide over this crisis.”