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Industry leaders want manufacturing to reopen even in red zones, with adequate safeguards

Industry bodies, leaders say protracted lockdown has started building pressure on businesses, affecting prospects of overall growth and development in India.

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New Delhi: Indian industry leaders have sought more relaxations to resume economic activity in urban areas and containment zones, pointing out that it is essential for kick-starting manufacturing after the nationwide lockdown due to Covid-19.

They have sought easing of curbs and resumption of manufacturing activity, pointing out that a phase-wise opening may adversely impact supply chains.

On 1 May, the government had announced that the lockdown, which began on 25 March, would be extended until 17 May, but permitted the resumption of many economic activities in the zones marked orange and green according to the number of cases detected there. But strict curbs remained in place in areas falling in ‘red zones’.

The new guidelines permit industrial activities in rural areas. However, in urban areas, only certain industrial activities taking place in designated industry zones are allowed. Further, no economic activity is allowed in containment zones.

While ‘red zones’ are high-risk zones with fresh cases being reported, ‘orange zones’ are places where no new cases have been reported in 14 days, and green zones are those where no new cases have been reported in 21 days, or there are no cases at all.

Based on the government’s projections, there are 130 red zones, 284 orange zones and 319 green zones as on 30 April.

Many districts in economically-significant states such as Maharashtra, Tamil Nadu, Gujarat are in the red zone, bringing economic activity to a complete halt. The whole of national capital Delhi, commercial capital Mumbai and important hub Pune are in the red zones.


Also read: Raghuram Rajan bats for quick reopening of economy, says India can’t support poor for long


CII’s suggestions

The Confederation of Indian Industry, in a representation to the government on 2 May, has sought that industrial activity should be allowed in all places, including containment zones, subject to safeguards.

It pointed out that there is a need for developing a strategy that minimises the impact of the lockdown on economic activities in the country, without compromising on the efforts at controlling the spread of Covid-19.

It has suggested that the “top economic districts in the country have an additional
relaxation that will permit industrial clusters and standalone industrial facilities, including those not designated as industrial estates, SEZs (special economic zones) or industrial townships, to operate”.

The CII said the protracted lockdown has started building pressure on large segments of businesses, adversely affecting the prospects of overall growth and development in the country.

“While businesses have, by and large, refrained from laying-off workers, a halt in the revenue streams has started causing serious financial distresses to them. If they continue to remain shut for longer, many of them would be driven into a financially unsustainable situation,” it said.

The CII has suggested that in containment zones, economic activity should be allowed, subject to restriction of movement of workers, sanitation protocol and testing.


Also read: India can spend more to combat economic fallout of Covid: IMF chief economist Gita Gopinath


‘Sub-divide red zones’

Kiran Mazumdar-Shaw, chairperson of Biocon Ltd, has also sought the creation of sub-zones within a red zone for restarting economic activity. She quoted a report that showed that nearly 53 per cent of India’s economic activity takes place in the red zones.

 

On 1 May, immediately after the announcement of the guidelines, Sangita Reddy, president of another industry body, the Federation of Indian Chambers of Commerce and Industry (FICCI), had said that while the relaxation will allow for a calibrated opening up of economic activities, many activities won’t resume.

“Though relaxations have been made in the business activities in the green and orange zones, and to some extent in the red zones also, significant part of the economic activity will still remain in abeyance,” Reddy had said, seeking a regular assessment of the zones to further relax the opening up of business activities.

Anand Mahindra, chairman of the Mahindra Group, also expressed hope on 1 May that after the lockdown is lifted on 17 May, the opening up is pan-India and comprehensive, pointing out that supply chains will remain paralysed otherwise.


Also read: Hunger deaths will far outweigh Covid toll: Narayana Murthy warns against lockdown extension


Kiran Mazumdar-Shaw is among the distinguished founder-investors of ThePrint. Please click here for details on investors.

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1 COMMENT

  1. Whole district is a big thing…it is foolish to whole district spread in 100s miles as red zone… They should be red hotspots only covering few miles around the infected areas… We should start learning to live with it… If this drags for more months millions will die of starvation and poverty our country economically as luxurious as Europe and USA. BY THE WAY THE DISTRICTS WHICH ARE IN RED ZONES CONTRIBUTE 70% TO THE ECONOMY OF COUNTRY… EVEN IF YOU ALLOW COMMERCIAL ACTIVITY IN ORANGE ZONE WITH OUT SUPPLY FROM INDUSTRIAL AND MANUFACTURING HUBS HOW THEY CAN START?

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