The global outbreak of Coronavirus has proved far more than a health emergency. Over a period of time since its incipient outbreak in Wuhan city of China, we have been observing its impact on societies and economies at their core. Even as the pandemic has been affecting the countries in various ways, poverty and inequalities at a global scale are commonly visible across geographies. The pandemic-induced lockdown has put millions out of job and millions have suffered substantial cut in their incomes, leaving them in acute financial distress.
The growing poverty and inequalities among cross section of societies has converted this unprecedented acute health emergency into an extraordinary economic crisis, which many experts are reminiscing it in line with the global financial crisis of 2008-09.
Even as this comparison of COVID-19 pandemic-induced economic shock is inevitable owing to similarities in certain respects, there are certain areas which are very different to the global financial crisis of 2008-09. In both crises, governments intervened (and continue to intervene in present situation) with monetary and fiscal policy to counter the downturn and provide temporary income support to businesses and households. But the Covid-19 induced lockdown imposing restrictions on movement and enforcing social distancing to slow the spread of the infection makes it dangerously different from the financial crisis of 2008-09. These unprecedented restrictions have directly affected the labour supply, transport and travel, leaving millions jobless. Activities of whole sectors of economies such as tourism, manufacturing, transport, trade and services etc. were shut owing to the lockdown.
Notably, during the course of the complete lockdown, the Government and the Reserve Bank of India (RBI) have taken some prompt policy measures – both short term and long term – through a series of stimulus packages in a calibrated manner to reinvigorate the economy. The Finance Ministry has even cited “green shoots” of recovery in agriculture, manufacturing and services sectors.
Now, when phase of unlocking the activities of various economic sectors has been rolled out, there are certain segments which are yet to receive any relief in terms of packages. Commercial road transport is one such segment which is still in locked position and craves for a relief package to stay afloat. Those associated with the industry feel neglected and pushed to wall with continued restrictions on their activities. The fraternity in both goods and passenger segment are a worried lot as their financial condition has substantially deteriorated owing to zero income during the period of lockdown and are anticipating frightful future in post-lockdown period.
All India Motor Transport Congress (AIMTC) in a statement has summed up that “the government imposed lockdowns and its apathy has pushed the road transport sector to dreadful levels. The temper and the frustration of the members from across the country were uniform. The government has failed to provide relief to this sector thus giving it a body-blow. There is extreme financial pressure on small operators who are highly fragmented and unorganised. The Prime Minister’s thrust for ‘Ease of Doing Business’ and ‘Sabka Vikas’ stands to be a dumb failure for the road transport sector. Livelihood and survival of crores of people dependent on this sector is at stake, which may push them to take extreme steps, in a case no benefit or facilitation is coming forth to them.”
Now coming to the plight of transporters in the local (J&K) context, the situation is similarly pathetic. Even as lockdowns are not new to this place, the Covid-induced shutdown has been proving a spine-breaking situation for the people associated with the sector. Notably, after August 5, 2019 incident, the transport sector was barely able to resume work for a period of three weeks before a complete pandemic-induced lockdown was announced in March this year. A media report reveals that more than 50,000 commercial vehicles are gathering dust and more than 1.5 lakh people including drivers and conductors who are directly associated with the sector are left without work and unable to earn anything for their families.
Precisely, people associated with the transport sector and mostly those who are entirely dependent on this sector for their livelihood have their own woeful tales of financial distress. Now in absence of a relief/ stimulus package in the Covid-induced situation, their miseries have compounded. Their past has been pitiable, present pathetic and future very uncertain as the revival of this sector in a post-Covid situation would not be a cake-walk.
To explain the miseries of this sector, let me reproduce tale of a passenger mini bus owner-cum-driver, which I have shared in the past through this column. Few years back, he had raised a loan little over Rs. 5 lakhs from the bank for the purchase of the mini bus to earn livelihood for his family of seven members including his old aged parents. It was the most memorable moment of his life when he first time plied the mini bus and that too full of passengers. His initial earning made him believe that all the financial problems at his domestic front were going to be a thing of the past. But his ‘belief’ was short lived. Regular spell of violence, year-after-year, and Shut down of all economic activities since August 2019 coupled with coronavirus induced lockdown in March 2020 dashed his dream of ‘happy home’.
Today, the mini bus is a huge liability for him. He failed to repay the monthly equated installments (EMIs) of his vehicle loan as he couldn’t ply his vehicle during the hartals and curfews. Even during normal days his income witnessed drastic fall, as the maintenance charges of his bus had gone up considerably. On so many occasions, his vehicle was damaged in violent incidents.
The things got worse as his vehicle suffered considerable damage as window glasses and major headlights of his mini bus were broken and the very sight of his vehicle today tells his pathetic story. His bank loan is swelling due to interest charged on the loan. He has nothing substantial in hand to feed his family properly and the most terrible part of his routine life is that he has to ensure regular chemotherapy of his ailing brother suffering from cancer. For this he needs minimum Rs.12000 per month.
Precisely, he is clueless today and it has considerably affected his mental health. He has lost his ability to perform even routine tasks at his home. Today for his extreme mood swings and behavioural problems, his family wants to take him to a psychiatrist but they don’t have sufficient money for his treatment.
These kinds of situations dot every locality. But stand neglected. This has led to serious economic depression. We have a huge small enterprises in retail, transport sector etc. which run at the back of a bank loan. And EMI is lifeline of this small enterprising sector. In the present circumstances, this EMI may be giving sleepless nights to the likes of mini-bus owner, as they are left with no means of livelihood to manage routine domestic affairs, and not to talk of paying their loan EMI.
So, the government has a responsibility to roll out urgent relief measures for the transport fraternity in the given situation. For this sector, moratorium on EMIs (Equated Monthly Installments) won’t provide any succor to them. Their EMIs need to be funded by the government which are not to be repaid later. In other words, a comprehensive package for the transport sector, especially for drivers and conductors, is inevitable. A monthly cash relief for drivers, who have completely lost income due to the lockdown, should have been rolled out by now.
All the statutory compliances, taxes and the fees to be paid upfront must be deferred for two financial years as there is no monetary inflow and business revival in short and medium term. Even tax holiday for the sector makes a sense. A substantial relief package will remove discontentment and despair among those associated with the sector.
(The views are of the author & not the institution he works for)