While COVID-19 posed a threat to the rural economy and people on various fronts, it also brought newer opportunities that could help to grow the rural economies.
Shubha Srinivasan, Rohit Nair, Ashish Gupta
As a measure to contain the virus, India declared a lockdown on 24 March 2020 for 1.3 billion people with the prime minister calling for joint action by people, not-for-profits, corporates, and governments. The complete lockdown in the country significantly impacted the quality of life and livelihoods of people. Considering that there has been a historical divide between rural and urban India with regard to the essential infrastructure for Health, Water, Sanitation, and Hygiene (WASH), supply chains, and other important services, the impact of COVID-19 was far more alarming for the rural community.
India witnessed an unprecedented and massive reverse migration of people from cities back to their rural roots considering that there were great uncertainty and loss of livelihoods that forced a large number of labourers to migrate. The system was not prepared for such large-scale migration and soon there were thousands of people walking on the roads. With such a large number of people trying to get back to their hometown the risk of the virus spreading in the rural areas heightened.
The migration further led to the burdening of the overall system in the rural areas considering that now there were more people who were to be provided with a job, food security, and healthcare. As per the projections based on a recent analysis by researchers at the United Nations University (UNU), it is estimated that an additional 104 million people in India could fall below the World Bank determined poverty line category, taking the overall count to 916 million.
After the COVID-19 outbreak, food security became a concern as people fell short of cash, food intake went down and there were not enough jobs for the migrants in villages under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The dependence of rural households during lockdown excessively increased on social welfare schemes like Public Distribution System (PDS). Several procedural challenges came in the way that was later addressed by the Department of Food & Public Distribution, Government of India through the implementation of One Nation One Ration Card (ONORC). This allowed all eligible ration cardholders to access their entitlements from anywhere in the country.
During the lockdown, the Agri supply chain came to a near halt and there was a delayed harvest of Rabi crop leading to distress sale while the preparation for Kharif got disturbed as the price of the inputs went up due to insufficient supply and black marketing. The slowdown in the urban economy also had its effect on rural India leading to an increase in the overall expenditure of rural households with limited or no livelihood options.
Due to COVID-19, there was a massive drop in sales of eggs, meat, locally manufactured, and non-timber forest produce (NTFP) products. Considering the unviability due to the falling demand several cottage industries, small and medium enterprises had to be shut down leading to further unemployment. The impact on the education of children is irreparable as there will be permanent dropouts and broader learning gaps due to the closure of the schools and colleges.
In order to address the challenges posed by COVID-19, there have been several immediate steps taken by the Government and corporates. CSR projects and the not-for-profit sector have helped in the short term, however, a long term roadmap is required to overcome the impact of COVID. Our recent study recommends a roadmap to recovery in a post-COVID-19 world through development and CSR initiatives. The response has to be dynamic that helps to create a regenerative economy while prioritising interventions for the most vulnerable sections of the community. Organisations would have to rethink the design and delivery of ongoing development/CSR interventions.
The CSR programs have to focus on community-centric initiatives, strengthening farmer producer groups, building sustainable supply chains from farm to markets. Projects that undertake skilling and up-skilling of the migrant labor are required along with strengthening of community-based organisations through capacity building initiatives combined with financial inclusion and enterprise development modules which would help to recover and thrive.
While COVID-19 posed a threat to the rural economy and people on various fronts, it also brought newer opportunities that could help to grow the rural economies. The large influx of labour in rural areas enables the availability of a trained labour force that could be engaged in rural industries. Decentralization of economic zone by having clusters of industries in the rural areas would help to provide employment to people locally while bringing down the manufacturing costs and will facilitate India becoming the leading manufacturer for the global economy. Collaboration is the key to achieve this by Government, Corporates, and not-for-profits coming together and executing by leveraging the resources and extending their expertise.
Shubha Srinivasan is Director; Rohit Nair is Associate Director, and Ashish Gupta is Senior Consultant at Deloitte India. Views expressed are the authors’ personal.