Battered Supply Chains in India Unlikely to Be Restored Soon
Date: Tuesday, June 23, 2020
Output at India’s production lines are unlikely to be restored before September as workers who fled cities for their rural homes amid the coronavirus pandemic aren’t expected to return until then, new research shows.
While a very small number of migrant workers may return to cities and industrial zones in July, the majority -- worried about getting infected -- will return by August-September, according to the research by Elara Securities Pvt. Some laborers from economically backward states such as Uttar Pradesh and Madhya Pradesh showed “inclination to return on being contacted by their employers,” said Garima Kapoor, an economist at Elara in Mumbai.
Migrant laborers, who make up nearly a fifth of the nation’s workforce, are key to building its cities and running factories as well as filling jobs including pulling rickshaws, guarding gated communities and hawking at street sides. They were the hardest hit by Prime Minister Narendra Modi’s decision to lock the nation down from March 25 to stop the coroanvirus from spreading, with millions left without jobs and incomes, and many forced to return to their villages by foot.
Unprotected by unions and politicians, migrants are often at the mercy of their employers for wages and benefits. They’ve struggled to access the $277 billion support package announced by Finance Minister Nirmala Sitharaman, which promised cheap credit to farmers, direct transfer of money to the poor and easier access to food security programs.
“Laborers from construction and building works have suffered severe economic shock during the lockdown, especially since they are unskilled and have limited bargaining power,” Kapoor said. “We have been told that many haven’t received compensation from the Building and Construction Workers Cess Fund as announced by the government.”