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Indian economy: government plans partial closure exit to boost stagnant economy | India Business News


NEW DELHI: India to allow information technology hardware manufacturers, farmers and industries in rural areas to resume operations after April 20, when Prime Minister Narendra Modi draws up a plan to exit the world’s largest blockade world and revive stagnant economic activity.

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Amid a three-week blockade that lasted until May 3, the government will also lift restrictions to allow e-commerce companies to move goods by road, as well as restart air cargo and port operations. , the Interior Ministry said in a statement. on Wednesday.

“To mitigate difficulties to the public, selected additional activities have been allowed,” the ministry said, noting that states were responsible for ensuring that all safety and social distancing protocols were in place. The exemptions will not apply to dozens of virus containment zones, in order.

Industries operating in rural areas, including food processing, mining and mineral production units, packaging material, oil and gas exploration, and refineries, will be able to operate, while highway construction, irrigation projects, construction and all kinds of projects in industrial estates. It will be operational. Agriculture and its related activities will remain fully functional, according to the order.

Partial lifting of the block:

  • Factories in industrial zones can start operations
  • Companies to provide dormitories to workers on or near factory premises
  • Rules of social distancing to request restart operations
  • The refineries will be operational along with the transportation and distribution of petroleum products.
  • Jute units and packaging material allowed
  • Coal production and transportation allowed
  • India has so far reported 11,487 infections and 393 deaths, according to data from Johns Hopkins University.

Weak growth

The move appears to indicate that the next three weeks to shutdown may not be as strict, said Anubhuti Sahay, head of South Asian Economic Research at Standard Chartered Bank.

“With the government allowing some economic activity to restart, especially in labor-intensive sectors, there is a possibility that the economic impact is not so bad,” Sahay said by phone on Wednesday.

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Standard Chartered had estimated that India’s GDP would be affected by 200 basis points after the blockade was extended and had forecast GDP growth of 0.7% in 2020-21. “This is the weakest we have seen grow in India in over three decades.”

Announcing the extension of the closure on Tuesday, Prime Minister Narendra Modi acknowledged the impact on the economy and said one of his top priorities was to reduce the difficulties faced by those who earn a daily wage, after the sudden closure caused dozens of Thousands. of migrant workers to flee from cities to villages after losing their jobs, raising fears of hunger.

Asia’s third-largest economy was on course to grow 5%, its weakest expansion in more than a decade in the fiscal year that ended in March. Now you are looking for a new slowdown.

India may be losing close to Rs 40,000 crore ($ 5.2 billion) daily due to the blockade with an estimated loss of up to Rs 8 lakh crore over the past 21 days, Sangita Reddy, President of the Federation of Chambers of Commerce India and Industry said in a statement, adding that nearly 4 million jobs are at risk during the April-September period.

Times of India