COVID-19 Economic Package: Impact on agriculture and rural economy

Dr. Maisnam Bobo *

In response to the COVID-19 pandemic and the subsequent months long national lockdown, the Prime Minister Narendra Modi announced a mega COVID-19 fiscal relief package of Rs. 20 lakh crore ($263 billion), equivalent to 10 % of GDP to turn the COVID-19 pandemic into an opportunity to achieve a goal of a self-reliant India (Atmanirbhar Bharat).

The Modi government's Rs 20 lakh crore 'Self-Reliant India' package, which was announced in five-part policy reform and fiscal incentive last month, initiated a number of new reforms, particularly in commodity producing sectors which are fundamental to achieve a goal of a self-reliant India (Atmanirbhar Bharat).

The agricultural segment of the 'Self-Reliant India' package includes measures such as creation of an agriculture infrastructure fund (0.5% of GDP), liberalisation of agriculture produce marketing, raising allocation to MGNREGS by 0.2% of GDP, and extension of Kisan credit cards (by 1% of GDP).

These measures come at a time when agrarian crisis is worsening due to Covid-19 pandemic and the ongoing national lockdown. At a time when our agriculture and rural sectors require greater economic safety net, these measures will lead to go a long way in transforming the agrarian economy.

In another landmark reform, Modi government has approved amendments to the Essential Commodities Act and brought an ordinance that removes all regulations over the pricing and availability of key agricultural commodities. These measures are part of the Rs 20 lakh crore lockdown relief package.

These proposals, by removing all restrictions and providing "barrier free inter-state and intra-state" sale of agricultural produce will ensure barrier-free trade in agriculture produce. "The ordinance will create an ecosystem where the farmers and traders will enjoy freedom of choice of sale and purchase of agri produce.

It will also promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations," a government statement said.

The official statement further added that "It has been provided in the amendment, that in situations such as war, famine, extraordinary price rise and natural calamity, such agricultural foodstuff can be regulated.

However, the installed capacity of a value chain participant and the export demand of an exporter will remain exempted from such stock limit imposition so as to ensure that investments in agriculture are not discouraged".

The government is predicting that agriculture sector could be a key driving force for the Indian economy as it is projected to grow at a rate of 3 per cent for the current fiscal year 2020-21.

Impact on Manipur

The current COVID-19 crisis can also be an opportune moment for Manipur. We all know that, the COVID-19 pandemic has been going global, and it could bring the entire global economy to a standstill. The impact of all this on poor states like Manipur will also be dramatic.

The pandemic is already affecting almost all sectors of the state's economy.

Given the uncertainties, the state must explore all possible ways to re-orient its growth trajectory to be self-reliant on the basis of the internal market by making the best use of the new COVID-19 relief package which addressed crop loan requirements of rural banks, minimum support price for crops, funding agricultural infrastructure, income support for farmers as well as liberalisation of agriculture produce marketing, raising allocation to MGNREGS etc.

By making the best use of the new package, the state government should now concentrate more on rebuilding the rural and village economy, by initiating crucial reforms to be self-reliant in commodity producing sectors. In addition, non-farm activities must be promoted with a greater emphasis on MGNREGS and MSMEs. The starting of small village-level enterprises in a number of sectors, such as processing local products is also urgently called for.

Thousands of returned-migrant workforce are going to stay on in rural/village/hill areas of the state and job openings for them have to be created. Work under MGNREGS has to be revived, so that the workers, including those returned-migrant workers who have returned without any earnings at the moment, can find some means of livelihood.

Infrastructural facilities must be provided in war footing to boost agribusiness activities in the state. Reviving the rural economy and giving an alternate push to the trajectory of development in a job oriented track is the urgent need of the hour.

The state government of Manipur can constitute an expert committee with the involvement of the planning department to undertake a quick assessment of losses to the state economy, particularly to sectors most vulnerable to the impact of Covid-19 crisis and lockdown.

The state government must assess the "immediate and medium-term" impact of the coronavirus pandemic on different sectors that contribute to the Manipur's economy.

The coming months will be crucial not only for fighting the pandemic, but also in giving a much needed boost to the rural economy of the nation. In this task, all stakeholders will have to work in tandem, and with a sense of urgency.