Covid-19: Inadequate relief for battered sectors

While the central government announced a financial package last year to deal with the sudden misery caused by Covid-19, relief measures are lacking this time. A small package amounting to Rs 1,250 crore announced by the state government is too little and vast sections of unorganised workers and industry have been left out.

The relief measures are very selective and inadequate, says M Govind Rao, economist, and member of the 14th finance commission. “Many sectors have suffered a great deal and livelihoods are affected among unorganised sector workers, small traders, and construction workers, among others. But they are not covered,” he says.

The government should have announced at least three times more than what it has announced now, he says. “First of all, there is a need to identify the target groups before announcing a relief package. The government should create a database of all those who are not covered under any government schemes and support them,” Rao adds.

The second wave of Covid-19 has dealt a deathly blow on the micro and small-scale industries as they face crises on multiple fronts -- on the labour front, finance, raw material supply, spiralling prices, bottlenecks in logistics among others.

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The Rs 1,250 crore package announced by the B S Yediyurappa government does not include the MSME sector, which contributes sizeably to the state GDP and generates more employment. “This war can be won only when we all join hands together, the need for extraordinary measures to bail out the MSME sector is a no-brainer,” says KB Arasappa, President, Karnataka Small Scale Industries Association (Kassia).

The government should extend a relief package for MSMEs just as it did last year. These measures hold more significance now since the second wave has caused more distress than the first wave, he says.

Some of the relief measures sought by the small industries include waiver of interest on term loans, working capital from April to July and deferment of loan repayments for the next six months. Industries should be extended soft loans at a 6% interest rate on all types of loans for the next two years.