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Workers in Unorganised Sectors Feel Economic Booster Unlikely to Work as FM Plans to Put Money in Hands of Government Employees Ignoring the Poor

Avadh Kumar Ram, a cobbler, is an old timer in Imphal. His parents and other relatives were staying in the state Capital before he also decided to join them, leaving his wife and children behind at his hometown in Ara district of Bihar. That was 20 years back, and now his children are all grown up and help in household work while their mother goes out to work as a farmhand in nearby fields. The anaemic looking 60-year-old wasn’t able to work in the last 4-5 months due to the pandemic lockdown and it’s only in the past 10-15 days that he started sitting again at his cobbling space that merges pictorially with the barren landscape in front of the Imphal Garage near BT Road. He’s been surviving on the little rice provided by the government relief all this while.

Scrap collector Farooq Hasan

Then there’s a younger 40-year-old Farooq Hasan who arrived in Imphal just prior to the lockdown in March and is quite satisfied and even humoured by the fact that the iron scrap dealer, with whom 7-10 more scrap collectors like himself stay, has fed them throughout the lockdown period. Farooq who’s from Murshidabad in West Bengal was told he could stay and do iron scrap collecting at Hatta in Imphal by people from his village, who are also doing similar work here, before he started for Imphal. Maybe he’s not so much affected by the bleakness of it all since he’s new and also may not know the pitfalls of staying in an unknown place, especially with a job that’s hardly going to pay him.

People like these two menial workers are abundant here in Manipur and for the first time since Independence even the elite class in India has spoken and felt bad about the abject economic conditions these kind of workers and villagers have been exposed to by the government’s mismanagement of the Coronavirus situation in the country. Everyone in the country has been following the poor man’s decline into steep bankruptcy and at least in the last six months economists were waiting for announcements, expecting the government will spend more even if it has to borrow from the market, to pull back the economy and hence save the teeming millions of the country’s poor from further indignity, literal starvation and unemployment. So when the latest announcements did come some days back from the Finance Minister Nirmala Sitharaman, the intellectuals in the country at least were appalled and called the FM’s proposed measures to boost consumer spending as complete ignorance of even basic economics, criticizing it for going against common logic and simple mathematics.

The reason for the collective disapproval of the government’s measures is that instead of putting even nominal sums of money in the bank accounts of the poor, the target group is the well-paid government servants who are all middle class, upper middle class or upper class segments. Tax benefits will accrue under the LTC cash voucher scheme to the government employees if they spend three times the fare amount on purchasing 12% or more GST items like fridge, washing machines, hair dryers etc. For example, if your fare amount encashed is Rs. 20,000 you will have to spend Rs. 60,000 on purchases to save tax on the Rs. 20,000 fare amount. Similarly, for 10 days leave travel concession amount encashed, the employee would have to spend an equivalent amount on purchase of 12% or more GST goods. The scheme is offered as due to the pandemic no one is expected to travel and so can spend the money without actually travelling. The demand expected to be generated is Rs. 28,000 crore, combining spending by both the Central and state government employees, if at all the states decide to go along. The private sector employees can also avail the benefit if employers choose to offer the scheme, further boosting the demand. The expenditures have to be done by March 31, 2021 and will, according to the government, improve the severely affected GST collections.

The festival advance scheme is a one-time payment of Rs. 10,000 interest-free loan in the form of pre-loaded Rupay card. The advance amount has to be repaid in 10 instalments. This scheme proposes to disburse Rs. 4000 crore, with a further Rs. 8000 crore if the states also provide a similar advance. Special assistance is also being provided to the states to boost capital expenditure in the form of interest-free 50-years loans for Rs. 12,000 crore. The northeastern states will get Rs. 1600 crore out of this amount and these funds have to be spent by March 31, 2021. The Centre will also spend Rs. 25,000 crore on roads, defence infrastructure, water supply, capital equipment and urban development which, again according to the FM, will boost demand in various sectors of the economy. The proposed overall infusion to the tune of Rs. 73,000 crore, with Rs. 36,000 as additional demand from consumer spending and Rs. 37,000 crore from Central and state capital expenditure, is projected to create a demand of Rs. 1 lakh crore in the economy.

Economists and experts are not happy with the FM’s announcements though, as they say even going by purely economic concerns the government employees may never spend and are more expected to save the money as people are getting aware that in Europe there is a second wave of closedowns due to the virus and one never knows how the virus situation is to shape up in India, although at the moment cases are falling in the past week or so. So the expected spending and resultant demand may never happen – even with the paltry amount with which the stimulus is supposed to come. On the other hand, if any money was put into the pockets of the poor, all of it would be spent in buying food as their incomes are sunk and being jobless are skipping one meal a day, or are in a worse condition.

In the unorganised sector 200 million jobs were lost and salaried job loss is another 19 million, according to estimates by a well-known expert, who also says that the government should have spent on rural employment schemes and urban employment schemes for 70% of the poor rural population and 40% of the badly affected urban population, instead of spending on the only section which hasn’t lost jobs and are well paid, i.e. the government servants. Spending on the poor so they can buy food is when the economy will start recovering, the economist who has come out against the size and focus of the new measures says. The expert also points out that actual data on production was not used, and if done so, the shortfall of demand would be Rs. 85 lakh crore, which is the expected decline in GDP. Compared to this shortfall the stimulus of Rs. 2 lakh crore offered in the May announcements, and now the Rs. 73,000 crore infusion is chicken feed, he says.

When will poor people like Avadh Kumar Ram and Farooq Hasan and scores of others here in Manipur get respite. They haven’t earned anything since the pandemic broke out early in the year and some may not be aware also of the condition their dependents are surviving in at their hometowns. What if any one of them is indisposed. Will they be destined to lose their lives? Farooq says he collects iron scrap for Rs. 12-13  per kg and deposits it at Rezawul’s scrap shop in Hatta at the rate of Rs. 14 per kg – that’s effectively just Rs. 2-3 earning per kg. Avadh Kumar is doing no better mending shoes and sandals, which work is hard to come by these days, as people go for new shoes. He sits the whole day in the sun and has to pay a rent of Rs. 2000 for his quarters also. It’s difficult to even imagine how one can survive under such conditions. A lot of their suffering is unknown to others it seems, and one wonders if they are even left with the energy to voice it at the end of each day’s labour. Certainly the latest attempt to boost Indian economy doesn’t seem to have taken the poor into account and neither is it expected to do any good to the country’s overall economy, in the situation it is stuck in at the moment.

One only wishes netizens come to the aid of the poor who have lost their source of income, like in the case of Baba Ka Dhaba in Delhi’s Malviya Nagar and the kaanji bada stall in Agra where a 80-year-old couple and a 90-year-old elder, one with unsold cooked food, and the other with kaanji badas, were helped by Delhi city’s netizens, and the Agra administration in case of the other, after videos of them, crying in one case, went viral on Twitter. One wishes poverty and suffering could be wished away, like in these cases, by the humanitarian help coming from sensitized citizens. Why, it could happen even in remote Manipur if social media is responsive to its duty towards fellow citizens.

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