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Mainstream, VOL LVIII No 23, New Delhi, May 23, 2020

Lockdown locks the rural economy: Some Preliminary signals from a surveyed village

Saturday 23 May 2020

by Dr. Atanu Sengupta and Dr. Asish Kumar Pal

Abstract:

India is rural based economy. Several workers of several sectors live in rural India. These different workers are basically in unorganized sectors. They are neglected and backward in the society. During the lockdown period announced by both central as well as state government to combat the spread of COVOD- 19 throughout the country, such type of workers are jobless. They are hopeless not to earn any income by which they can maintain their families properly at this situation. They are in misery condition despite of assistance by the government. From wage earners to marginal farmers, small shoppers, construction workers, fishermen, Weavers, and middlemen of milk all are in poor economic condition at this moment. These different economic agents are worried about minimum daily food which are required to their family members. They are afraid by thinking that they will be forced to lose their last shelters and necessary utensils very soon. So the rural workers are directly affected by lockdown by locking the total rural sector not only in West Bengal but in whole of india. In this way the rural economy is all set to way into a great depression unless proper steps taken by the government.

Introduction:

The Indian government on March 24 announced a 21 - day nationwide lockdown and added more upto 3rd May to prevent the spread of the disease novel coronavirus.. Due to this coronavirus -induced lockdown, most economic activities have come to a standstill. RBI report confirms prolonged pain for rural economy. According to RBI the COVID -19 outbreak and the prolonged lockdown may have a devastating impact on the rural economy (Source: Moneycontrol.com, April 09, 2020). A recent study was done by Harjinder Singh, of Patiala in Punjab, about the impact of the Lockdown in Punjab, expressed about the impelling the food security of several households (April, 2020),

It is acknowledged that rural sector of the economy is so significant for the country that almost all the operations of the country’s people bear it’s stamp. India is predominantly a rural community with two third of population and 70% workforce residing in rural areas. Rural economy constitutes 46% of national income ( census: 2011). Most of the rural households depend on agriculture. Agriculture is an important sector of Indian economy as it contributes about 17% to the total GDP ( Nity Ayog report, 2017). Not only agriculture bit also some others sectors are in rural areas. Laager population depends on them. The rural people are now jobless due to lockdown from 24 the March to still today. In India with a share of almost 90% of people working in the Informal economy, about 400 million workers in the Informal economy are at a risk of falling deeper into poverty during the crisis ( ILO report, April, 2020). So rural sector is not out of this situation.

According to United Nation , WFP the people who are daily wage earners will suffer from covod- 19 situation (April,22, webdesk, ABP Amanda). A very recent survey was conducted by (NCAER) National Council of Applied Economic Research included 1,750 participants covering both rural and urban areas of Delhi on April 3-6, 2020, released the data showed that casual labourers were disproportionately affected with nearly 75% stating their wages were severely affected which is less than half,at 46% for salaried employees ( April 13, 2020).

A report is published that ‘India covid – 19 lockdown means no food or work for rural poor’ by Purohit ( April, 2020). Most of the recent studies are covered by impact of Indian economy for lockdown. We have tried to understand the impact of lockdown on rural economy.

Rural Condition:

Gourhati village in Hooghly district in the state of West Bengal has a population of nearly 15000 (according to Panchayat records) and near about 13,084 (census report 2011). Many of the village residents both male and female depend on unorganised sector. According to our 90% population works in unorganized sector. Out of them are engaged in agriculture sector and non agricultural occupation. The person’s who are in non agricultural sectors, daily wage earners. They work basically agro- based industry units ( like cold storage, vegetable transporters, vegetable sellers), grocery stores, medical stores, stock holders, small street holders, Fishermen, milk middlemen, and Weavers etc. In addition to agricultural workers and land owning farmers. Some individuals also work as plumbers, electricians and massons, while some female wage workers work as domestic workers in the house of rich people of selected village or vegetable cultivation sites outside the territory of the village. The lockdown system for protect of covid -19 has had a several impact on these workers. Many of respondents reported that during the lockdown they are unable to move to work. So they have entirely lost their daily earnings.

Here we have selected some workers among the various sectors in our study area. We have classified various labourers of several sectors as economic agents who are basically Included in the poorer section of the study area i. e , agricultural labourers, construction workers, small Street shoppers, construction workers, fishermen, Weavers and middlemen of milk etc. Among all these who are adversely impacted by lockdown, we have established the set of these labourers who are directly exposed to jobless situation. We study their difficulties associated with this lockdown for preventing against the spread of covid -19 positive. Government provides them with some meager assistance distributing food and cash. However, even these are not adequate utilised by them.
So, all in all, we have concentrated on basic problems that are associated with lockdown situation and their possible economic outcomes. We hope that our Study will help to focus on these socio – economic effects of lockdown particularly in the rural based underdeveloped economy like India.

Empirical findings :

First consider the sector wise distribution of the sampled workers who have been unemployed during this period for covid -19 in our selected area.

Table 1: stratified sample of workers among the several sectors

Types of workers No of workers
Farmers 20
Small shoppers (street stock holders, street vendors) 20
Construction workers (masons, carpenters, electricians) 20
Weavers 20
Middlemen of milk chain 20
Fishermen 20
Total 120

(Source: Telephonic survey)

We put some questions regarding the bank loan, BPL card and RKSY card holding among the several workers of several sectors and also different difficulties faced by the people to understand the misery condition of them in our rural area.

Table 2:. Distribution of Financial loan, other source of income and BPL & RKSY – 1card holders among the farmers

Types of holding facilities. No of farmers
Loan facility. 70%
BPL holder. 60%
RKSY -1 holder. 60%

(Source: Telephonic survey by authors)

First of all agriculture sector, the farmers in the village primarily grow ‘ boro’ in rabi season which is concerned the harvesting period at this time, which usually begins in last week of April and first week of may. They also grow vegetables which are mostly for household consumption. 90% farmers of the respondents reported incurring huge losses through the lockdown period as they have been unable to transport for selling at the mandi and nearest market. They are also thinking for ‘boro’ paddy harvesting in this season despite both the central and state government has permitted to work in agriculture and agricultural related activities. They expressed afraid about harvesting their paddy in properly. 70% farmers were worried about the repayment of loan properly. 60% of the farmers do not have BPL and RKSY card. So they are not enjoying the facilities like free food and essential commodores in this situation. However 96% of them have no source of other income. So, they are in low standard of living.

Table:3 Distribution of Loan facility, BPL & RKSY-1 card holding of small shoppers

Types of facility No of. Small shoppers
Bank loan 85%
BPL 15%
RKSY -1 30%

(Author’s telephonic survey)

Next we come to the small shoppers and street holders who are directly exposed to lockdown system. Their shops have remained closed from the first day of lockdown and so on. 95% of them have no other source of income. They expend the amount which is earned by themselves per day. They are also in misery condition. Most of them are not BPL card holders and some one are RKSY -1card holders. From the above table it is clear that they are not getting any help from the government so their conditions are very pathetic. 84% of small shoppers have started their business taking the bank loan or any other source. They are also worried how they will borrow in future.

Table:4 Figure of enjoying Loan, BPL & RKSY-1 of construction workers

Classification of facility. No of construction workers
Loan financing. 20%
BPL holders. 40%
RKSY -1. 55%

(Authors’ telephonic survey)

Similarly we observe the construction workers who works in the nearest town or nearest other villages are quietly job less because they are not working for closing of hardware shops and moving to the workplace due to stop of vehicles communication. Although after 20 the May the government has excluded construction sector out of lockdown yet they are getting forced to work place by the nearest villagers or people of town as their area is lockdown for protecting against spread of coronavirus. Although a very small of them have taken loan yet maximum of them are not enjoying such facilities like food and other necessary commodities through Public Distribution System for not holding of such type of cards.

Table: 5. Distribution of Loan from ‘mohajon’ , BPL & RKSY -1 holders of Weavers

Varieties of facility. No of Weavers
Loan. 95%
BPL. 55%
RKSY -1. 65%

(Authors’ telephonic survey)

Next come to the Weavers who sell their making cloths to ‘mohajon’ or big cloth agents. They cannot sell this because whole sale market is totally locked that leads to unsold. Although they produce the cloths to first weak of the lockdown period, wholesalers refuge to take. So they have stopped their production and stand still now. In this job less condition they are fighting to combat the spread of coronavirus in the rural area. 65% of the respondent Weavers belong to poor section of the society so they have no income at this moment. More or less 95% of Weavers are suffering from pay to because they take advance money from mohajon and stock holders or wholesalers. Only 55% of them are BPL card holders who are enjoying full free ration and rest are not. So their economic condition is not very good.

Table : 6. Distribution of Bank loan, BPL & RKSY-1 card holders among middlemen of milk

Types of facility. No of milk middlemen
Bank loan. 10%
BPL holders 30%
RKSY -1 holders. 50%

(Authors’ survey by Telephonic method)

An other essential commodity that the villager produces milk is bought by middlemem twice a day who then sell it at milk booths in urban areas. The remaining milk is either sold to other households within the village who do not own their livestock or is used by milk producing households themselves. According to 85% of the respondents, the middlemen refused to buy milk on the first two days of the lockdown due to the closure of urban milk booths. Although the government has permitted to continue to collect and open milk booths after some days of this period, the workers relating to milk supply are not present for transport crisis. So, the middle men are also jobless. In our study area they have not required to make of Bank loan or any other loan. Only 30% of middle men of milk belong to BPL family. So, 70% of them are not getting help of government.

Table: 7 Distribution of Loan from fish merchant and BPL&. RKSY -1 card holders of fishermen

Varieties of facility. No of fishermen
Loan from wholesalers of fish. 70%
BPL. 60%
RKSY -1. 60%

(Authors’ survey by telecalling)

Now we come to our last economic agents who are engaged with fish catching and selling. The fishermen of this area move to catch fish in the nearest villages and sell in the local market. They face a demand drop because most of their customers (i.e., villagers) are either jobless or have paucity of cash at hand. A 75% respondent fisherman faces the problem of being fish unsold. From the above table we see though maximum of them are BPL and RKSY card holders the rest 40% are absolutely in misery condition. They are also worried about the debt which is taken from wholesaler fish merchants.

From above discussion we understand that most economical activities have come to standstill. We have also surveyed the Gram Panchayat pradhan. He told us that most of the households are registered under MGNREGA scheme. However the workers have not be given work for even a single day during this period. Although both the central as well as state government provides some opportunities through public distribution system and transfer of cash into bank account of the poorer sections of the society, they are unable to maintain their family properly by a little assistance. So in this situation they are upset and hopeless. They have been able to save only meagre amount for rainy days. Hence they have little to fall back upon by which they can buy essential and daily food. During this period they can not take care of health and nutrition to their family members.

The economists of United Nation, World Food Program recently reported with when free from the covi-19 pandemic current situation, the world will be in crisis of food. They are afraid that 26.5 crore people will spend the days in terrific food crisis ( April, 2020). We observe that there is absence of labour market despite of huge labour supply. Most of the people of the workers of the society are job less in this area so they have no purchasing power. They can not create demand in the rural market. Most of them have reported their miserable condition. When asked to rank them on a Likert scale with the level varying from miserable to good, most of them concentrated on the lowest point
(Table 8).

Table 8: Distribution of misery condition despite of government assistance

Types of workers  % of sectoral workers
Farmers. 80%
Small shoppers. 90%
Construction workers. 75%
Weavers. 85%
Middlemen of milk. 65%
Fishermen . 70%

(Source: Telephonic survey by author)

Concluding Remarks:

Coming to the conclusion point, villagers of Gourhati have faced various difficulties during the spread of covid -19. All types of economic agents in this area have faced huge financial losses. The farmers are anxious about harvesting the ’boro’ production, the small shoppers are in depression, the construction workers are in jobless, the middlemen of milk are unemployed, Weavers are in recession and fishermen are in unsold condition. If the farmers face difficulties to collect their paddy properly, the food crisis will be appeared in the world in future. Starting from the daily wage earners to marginal workers, Small street holders and sellers are more poor even they will be forced to sell their last capital like shelters and essential amenities. So, the rural economy is not excluded from the impact of lockdown for covid – 19 pandemic . It is clear that unless proper steps taken, the rural economy is all set to enter into a great depression.

Reference:

Anganwadi report of local Panchayat (updated) [7]
A report of RBI on rural economy, ( April, 2020), moneycontrol. [1]
Census report, 2011 [3]
ILO report, (April, 2020)
NCAER report , (April, 2020), A survey report on effects of unorganized labourers due to covid-19. Economictes.indiatimes. [6].
Nitiayog report, 2017 [4]
Purohit, kunal , (April, 2020), A news report on rural economy due to lockdown. Aljazira.com news [6].
Singh, HarjindermcC, ( April, 2020), A study on impact of lockdown on the rural economy. Networkidea. [2].
Webdesk report, (April, 22, 2020) [5]
United Nation, World Food Program report, ( April, 2020) [8].

Dr. Atanu Sengupta, Professor, Economics Department, Burdwan University, Burdwan,
West Bengal, India
email:sengupta_atanu[at]yahoo.com

Dr. Asish Kumar Pal, Assistant Professor, Economics Department, Tarakeswar Degree College, Hooghly, West Bengal, India
email:asish.kr.pal[at]gmail.com

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