Impact of lockdown on the economy of Manipur and some measures

Oinam Nabakishore Singh *

Since the lockdown on 25th March, 2020, imposed by the Government to break the chain of infection of coronavirus among the people, almost all people in Manipur have been, by and large, cooped up inside their respective homes.The economic activities have come to almost a standstill. No one goes out to the field for farming works.

Supply of feeds to poultry, piggery, cattle, fish farms is snapped as shops and sources of supply are closed and no movement on the road for buying-selling is allowed. Vegetables and fruits are hard to find buyers in the rural areas. Milk remained uncollected from farmers and not processed and sold. Farm sector, which employs more than 70 percent of the population has been turned upside down.

All small manufacturing units are closed for more than one month without any production. Service sector covering education, health, transport, tourism, hospitality and entertainment industry witnessed similar fate. Courts being closed except for pressing cases, all lawyers are at home without any meaningful pleading in the court.

The flow of cash in the economy is minimal. There is little multiplier effect at play in the economy now. A large section of the population is surviving on little savings or on dole. However, in the climate of scarcity, a large number of public leaders and civil society organizations have come forward to distribute essential items among the people to provide some relief.

Both the central and state governments have also extended some relief to the poor and weaker sections of the society though the assistance is far too short to meet the needs.

The government of India’s relief assistance during the lockdown includes transfer of Rs. 2000.00 under the PM-KISAN scheme (an existing scheme of the government to grant Rs.6000.00 to each farmer per annum) to the farmers already registered, three free LPG refills to the beneficiaries of PM Ujjwala Yojana, three instalments of Rs.500.00 each to the accounts of Pradhan Manntri Jan Dhan Yojana account holders,and 5 kg rice and 1 kg dal to each person holding NFSA card.

Such assistance do give some respite to the poorer sections of the society during the difficult period of lockdown. However, that assistance is far short of daily needs of the people for food, healthcare, education and other needs. Lockdown has completely almost all sections of people deprived of any earning and livelihood in the state.

Teaching and learning in all educational institutions including coaching institutes have come to a grinding halt. While online learning possibilities are there to some extent, most of the institutions in both public and private sectors have not used the technology significantly to deliver the services. Loss of learning in the last about 40 days is difficult to make up.

Now, the authorities are compelled to give promotions to students without examination. Such steps and measures, though required, will have some detrimental effect on the discipline and commitment of students with respect to education, which is important in building a society of hard work and discipline.

Such deficiencies will get reflected in organizations where such students work in future. In economic terms, chances are there for lower productivity and efficiency.

Just as an ocean is made of single drops of water, the economy comprises of output from all individuals, who are poor or rich, men or women, rural or urban dwellers and organisations, small and big. A porter in Khwairamband market, a rickshaw puller on the road, a mason making a house somewhere, a factory worker in a small fruit processing unit, a barber or an accountant do contribute to the economy.

In the absence of any avenue for working, all of them have not received any remuneration for many days. In service sector too, except some lorries transporting essential commodities for FCI and others, transport sector has completely ceased to render the much needed services. Overall, the economy of Manipur, like that of other states in India would contract/shrink by more than 10 percent.

The question before us is finding ways to take such measures to bring the economy back to track.

We need to divide the economy of Manipur in small segments. Agriculture being the mainstay of the maximum people living both in the valleys and hills, it is necessary to analyse the needs of all aspects of agriculture including horticulture. In the hills, paddy plantation by jhuming is very much necessary for sustenance.

There are also a number of small valleys and terraced fields, which are suitable for wet cultivation.In the five valley districts too, ploughing of fields for rice cultivation for the Kharif season has commenced. Because of closure of many petrol pumps and limited sale of diesel to the owners of tractors, ploughing is not happening in full force.

The oil depot at Malom has storage capacity to meet diesel requirements for upto 40 days. Sufficient stock of diesel should be available there. However, when enquired from Indian Oil Corporation and officials of Manipur Government, the reply came informing of restriction imposed by the state government on sale of POL.

Government should reconsider such restriction as sale is possible by following social distancing. It is also high time to adequately stock chemical fertilizers of all categories by making arrangement for transport from the concerned suppliers. Further, the Government may as a one-time measure make chemical fertilizer available at subsidized price in order to boost the application of fertilizer .

There is need to pay attention to agricultural credit requirements of the farmers. Cooperative credit structure has collapsed in the state due to mismanagement and consequent default. Considering the importance of institutional credit and high cost of credit from money lenders, it is imperative for the government to revive the agricultural credit through cooperative societies.

The existing credit through Kisan Credit Card needs both expansion and depth. Reserve Bank of India in its recent announcement increased the refinancing limit to NABARD by Rs.25,000.00 crores to meet the additional credit needs of farmers. The cost of finance/refinance by NABARD to State Cooperative Banks/Regional Rural Banks and Commercial Banks is only 4.5 percent per annum now
( Source: https://www.nabard.org/interestrate.aspx?cid=502&id=24).

Hence, interest of short-term agricultural credit should not exceed 6 percent per annum while the money lender may charge upto 60 percent per annum.

Most of the industries in Manipur are micro and small ones. Many units are home-based –handloom weaving, carpet making, cane and bamboo, wood carving, spice making, food processing, etc. Water packaging units have been meeting the increasing demand of packaged water. The lockdown due to COVID-19 has completely stopped any production.

The owners are facing problems of cash flows–repayment of loans to the banks and payment of salaries/wages of staff being severely affected. Supply chain of raw materials, packaging materials, sale of finished products is completely snapped. There is need for support from the government to pay the wages of the employees/workers as many owners are not in a position to pay the salaries during the lockdown.

Postponement of EMIs of term loans for three months without waiving of interest is not good enough as the owners will have the liability of repaying the accumulated interest.

Union Minister of MSME, Shri Nitin Gadkari, indicated requirement of Rs.1,00,000 crore to help the MSME units in the country even though no announcement has so far been made by the Union Government. It was also mentioned by him that MSME sector employs about 12 crore people and it’s share in Indian export to be 48 percent.

Handloom weaving by women folks in Manipur is an important sector generating self-employment of lakhs of women in both hills and valleys. After the lockdown, supply chain of yarns and marketing of finished products have been completely stopped. Daily earnings from weaving has consequently stopped leading to more difficulties for families dependent on this trade.

Manipur Handloom and Handicrafts Development Corporation is doing a very good job of making face masks to be used by people by using handloom products of Manipur. More than one lakh such masks have been distributed. Further, it has also started supplying yarns to the Yarn Banks in villages and handloom clusters.

Prolonged lockdown will worsen the socio-economic situation in Manipur. Far-flung areas having problems in transport of essential commodities are hit harder. Government need to do area-wise analysis and consult health experts with the aim of relaxing lockdown in those areas where the risk is minimal in order to start the economic activities.

Further extension of lockdown in Manipur, which is free from positive cases as of now, should be done prudently and selectively by taking all factors into account.