Labourers from SC, ST and OBC communities are the worst affected by lockdown: DICCI chairman Milind Kamble
The Dalit Indian Chamber of Commerce and Industry (DICCI) estimates that it will take at least 6-8 months for the industries to come back to shape after the lockdown is lifted.
India is currently under, what experts are suggesting, one of the biggest and strictest lockdown measures in the world. According to analysts and experts, just the initial 21 days of lockdown brought as much as 70 per cent of economic activity to a grinding halt and may have cost the Indian economy Rs 7-8 lakh crore. In such a situation, the worst-hit are most definitely small and medium businesses whose survival has become uncertain following the imposition of the lockdown to prevent further spread of COVID-19 in India.
“Of course lockdown has meant a 100% stop to the activities for most of the small and medium businesses, but even before that, since the coronavirus problem began in China, the supply chain of the entire world started fumbling. In effect it got shut down. So for the many MSMEs (micro, small and medium enterprises) who deal with garments, leather work or electronics, the orders they had placed way earlier, never came. So many such small industries have been suffering since at least two months before the lockdown was imposed,” says Milind Kamble, the founder chairman of Dalit Indian Chamber of Commerce and Industry (DICCI).
The worst affected are the daily wage workers and labourers who have completely lost their livelihoods all of a sudden due to the lockdown, says Mr Kamble. “The ground reality is that there many thousands of labourers and daily wage workers who don’t know how to feed themselves and their families. So we have to feed them and thus that’s the first thing we should do. The supply chain of food processing and FMCG (fast-moving consumer goods) markets are crucial in that. So the government must focus on that,” he adds.
“The other big problem is in the agricultural sector. We are getting a lot of reports that (for example) eggplants or tomatoes have ripened, but the farmers are being forced to feed it to their cows because there is no one to buy the produce,” points out Kamble.
“But the worst among the worst-affected,” he says “are the labourers from the SC, ST and OBC communities as they form a huge part of the labour force in the country.”
Estimating that it will take at least six to eight months for the industries to come back to life, the DICCI chairman said that demand will the first and primary impetus to kickstart the business activities post lockdown.
“Even of there is a demand, there are two problems that need to be addressed in the interest of the small businesses: the government is repeatedly asking companies to not lay off their employees now and to pay them salaries, but where will the money come from if there is no business happening? So the working capital or the credit a business owner gets from the banks should be increased from 20% of total turnover to 40% of total turnover. It’s the need of the hour. I have asked the finance ministry, the PMO and even RBI to bring a change in the rules and allow banks to lend more. This will also solve the problem of liquidity crunch. As of now RBI has left it to the banks, so the banks should come together allow this to happen. The second thing should be to clear of any dues to the small businesses. The SMEs should get their receivable amounts immediately,” Kamble asserts.
Earlier, experts had suggested that more than one fourth of India's 69 million MSMEs may shut shop if the lockdown extends beyond four to eight weeks, as a majority of them will have a cash crunch.
Despite the doom and gloom in the industries the country, he does see a silver lining in this massive global crisis. “India has one hope stemming from this crisis. China happens to be the manufacturing hub of the world and the entire world has invested in China. Now that this crisis stemmed from China and disrupted the global supply chain, so definitely the world will move from depending on manufacturing in a single country. The alternative to that could be India. I am not saying this out of thin air. Several of the SMEs that I know, have started getting enquiries from multinational companies like Samsonite for example. So granted that today seems bleak, but tomorrow it will be bright,” says Kamble with hope in his voice.
Listen to the full conversation here: