Prospect and challenges of the rural economy after COVID-19

Prospect and challenges of the rural economy after COVID-19

By- Sujata Sinha

INTRODUCTION

Today the whole world is going through a critical condition due to COVID-19. This pandemic has brought the entire nation to a halt. The disease is spreading in the whole country at a high speed. Each day there is an increase in the percentage of new cases. The risk of spread in rural areas is high. This is due to several factors, including lack of awareness, a limited supply of clean water, low level of nutrition, and most important, ill-equipped and insufficient public health centers and district hospitals. India has incrementally relaxed its lockdown to boost its ailing economy. But this has made it easier for some 40 million standard migrant laborers to return to their homes from the cities. Not only did they take their meager belongings with them but, many are carrying coronavirus to India’s vulnerable rural hinterlands, where health care provisions are some of the worst in the world.

INDUSTRIES IN CITIES BEING BADLY AFFECTED HAS RESULTED IN LOSS OF RURAL INCOME

Slowed down economic activities in urban areas affect rural areas as well. Numerous studies and experience from the field indicate that a significant proportion of rural household incomes from migration and daily wage laborers. The informal industries in cities being badly affected have resulted in a loss of rural income. What’s more, massive layoffs and lack of relief measures are pushing migrants to return their villages, which would increase the risk of the spread of the virus.

To tackle the problem, state governments have sent advisories to the rural areas through the district administration, which then passes it down- to spread information about how to deal with the virus affected cases as well as about how to reduce the chance of its spreading. However, proactive measures are taken by the government and civil society to safeguard rural populations from the economic fallout of this pandemic like:-

Continuing the supply chain of midday meals and Anganwadi meals, and delivering them to the family’s doorsteps, so that the children and pregnant mothers get at least one meal a day.
Supplying free ration to rural households through the public distribution system.

BALANCING CHALLENGES AND PROSPECTUS IN RURAL SECTORS

According to the census 2011, nearly 69% of India’s population lives in rural areas but agrarian income sustains about 50% of its citizen. Other sectors such as construction and low-end manufacturing are replacing traditional livelihoods in rural India. Due to this changing pattern of economic dependence, lifestyle, and consumption habits in rural India are set to transform the near future, which will open new challenges to those engaged in rural management. Covid-19 made the laborers struggle to survive and their rights need protection more than ever. Before now, rural management was centered around cooperatives, agri-business, and allied fields. Various developmental organizations, both private and government, national and international are part of schemes and policy implementations in rural areas.

India needs to have a clear policy to survive and grow in the post-covid-19 world. Based on these early signs, five trends and suggested policy responses are listed below.

POST COVID: INDIAN AGRICULTURE

India has a great opportunity to promote sustainable agriculture. In this time of crisis, social stability is of paramount importance and that is secured with the production and distribution of food grains. India in general and particularly some of the states like Telangana did very well in terms of producing the much-required food grains. For the next year, until the economy starts recovering, at least there will be food for everyone. So spending on agriculture, particularly for the steady supply of food grains, is extremely important. India needs to refocus on the agriculture sector after COVID, but in different directions such as:–

Organic agriculture to meet the growing demand in urban areas for quality food. There is enough market, but the government needs to have policies to promote, certify, and streamline markets with reliable organic food. People are ready to pay a huge premium for organic produce;
Directing subsidies to organic inputs;
Focusing on value addition and rural agri-processing industries so that jobs can be created in rural areas and pressure on cities can be reduced. Sustainable agriculture should be the focus, approaches and technologies are now mature and available. India needs a serious policy and programmatic approach to take advantage of these methods through incentives.

Rural employment is one area in which India needs to go a long way. After COVID-19, the strategy should be to develop policies and institutional frameworks to create entry-level, mid-level, and low-end jobs in large numbers, mostly in rural and semi-urban areas. Financial institutions lending that creates jobs with limited capital. Covid-19 is a global disaster for which the world was unprepared. But the world and India must draw some major lessons out of this unpleasant experience and turn it into a positive one. Doing more of the same after the lockdown is fully lifted is not at all an option. Let us hope that a new thinking process will lead to better policies that help us come out much stronger, with more resilient economies and health systems, mostly in rural areas of India.

LIFE AFTER LOCKDOWN: INDIA FACES RURAL EPIDEMIC AS MILLIONS RETURNS TO VILLAGES AS CURFEW IS EASED

India has incrementally relaxed its lockdown since May 1 to boost its ailing economy. But this has made it easier for some 40 million stranded migrant laborers to return to their villages from cities. Not only did they take their meager belongings with them but, many are carrying coronavirus to India’s vulnerable rural hinterlands, where healthcare provisions are some of the worst in the world. After lockdown, at least 130 million Indians lost their jobs. Migrant workers were suddenly stuck in cities, without a form of income or means to feed themselves and desperate to return home. All incomes, employment, and all investments have completely stopped. The farm economy is the only one still operating. The products like, milk, vegetables, fruits, grains, etc; all are continued to function.

What we need is a package of policy support to make sure that these enterprises can achieve their full potential as units of production, employment, and income. To make this happen, some specific interventions could spur the revival of the rural economy led primarily by agriculture.

Steps to revive the rural economy:–

Expand NREGA and fund it liberally: Around one-third of the farms in India are essentially unviable from an investment point of view because they are smallholdings. These marginal farmers and agricultural labor may produce enough for subsistence, but most are dependent on wage labor. They will hence need a safety net to survive the economic effects of the pandemic. The primary instrument we can use is NREGA, which should be liberally funded in the coming year.

Provide finance directly to the farmers: The farmers are the ones who serve the food needs of the nation, the critical input is going to be capital. The government must deliver finance directly to the farmers through the primarily agricultural co-operatives societies, commercial banks, a special line of credit, and Kisan credit cards. Whatever means are available should be used to put money into the hands of the farmer so that we can have the biggest Kharifs programs going into the next season. There will be a surplus amount of labor in rural areas soon because the maximum of the migrants would like to stay in their home village and work there.

Explore exports aggressively: For several years we have been talking about Make in India for the world, but it has been limited to the industrial and service sectors. This COVID-19 emergency should drive us to include agriculture, and look at the world as a market for our agricultural produce. If we need to excite rural producers to invest in their farms, we will need to look beyond the local, rural economy. And given that today, internally, we are a surplus market on all food products we should look outward. This could be an opportunity for India to tap the world food market as a supplier. For this, we have to upgrade our agricultural infrastructure and can attempt to move in that direction.

Use of surplus labor to build rural infrastructure: Much of the migrant labor which is usually employed in the real estate, tourism, restaurants, and the low-grade service industry in urban India will likely remain in their villages for at least the next 2-3 years. This should be seen as an opportunity to upgrade our rural infrastructure. We can use returning labor and public money to develop the rural economy and infrastructure.

Create an enabling policy environment: The final and most important steps in reviving the rural economy is an integrated policy package which looks at the entire rural situation holistically. As agriculture is certainly the primary engine of the rural economy. We have to also look towards the non-farm sectors like handlooms, handicrafts, and rural SMEs to unlock the full potential of the employment and income generation.

CONCLUSION

Today the whole world is going through a critical condition due to COVID-19. This pandemic has brought the entire nation to a halt. The risk of spread in rural areas is high. This is due to many factors, including lack of awareness, a limited supply of clean water, low level of nutrition, and most important, ill-equipped and insufficient public health centers and district hospitals. India needs to have a clear policy to survive and grow in the post-covid-19 world. India has a great opportunity to promote sustainable agriculture. In this time of crisis, social stability is of paramount importance and that is secured with the production and distribution of food grains. For the next year, until the economy starts recovering, at least there will be food for everyone. So spending on agriculture, particularly for the steady supply of food grains, is extremely important. The farm economy is the only one still operating. The products like, milk, vegetables, fruits, grains, etc; all are continued to function.

Expand NREGA and fund it liberally
Provide finance directly to the farmers
Explore exports aggressively
Use of surplus labor to build rural infrastructure
Create an enabling policy environment

REFERENCES

Puri, Laxmi(April 06, 2020), Noronha, Gaurav and Seth Yogima Sharma, ET Bureau,( March 17, 2020), Economic Times, ET commentary (09 April 2020), Vyas Mahesh (21 April 2020), The Hindu @ Bussinessline Retrived (25 March 2020), Indian Express (23 March 2020), Sharma Aman (16 April 2020), kumar anish , Sharma Pravesh, Kumar B Vinod, vice chairman, Telangana state planning board, Joe Wallen, New Delhi, Mohammad Sartaj Alam, Jharkhand (25 May 2020)

Sujata Sinha is principle in-charge government upgrade high school lalpur deoghar and a Research scholar, SKMU, Dumka, NET Qualified.