Covid-19 impact and responses: India

Updated on: 16 April, 2020

What is the current situation?

General information

India’s 1.3 billion people have gone under complete lockdown in a bid to stem the spread of coronavirus, which has claimed over 17,000 lives across the world so far. This lockdown measure includes sealing borders and restricting movement to only essential services. Refusal to comply by directions given by the Centre or the respective state can incite punishment, including a jail term of up to 1 year or a fine or both. If non-compliance leads to loss of life or danger, it shall incite punishment of a jail term of 2 years.

Source: https://economictimes.indiatimes.com/news/politics-and-nation/government-issues-rule-book-for-the-21-day-countrywide-lockdown-here-are-the-details/articleshow/74798556.cms?from=mdr

The government also issued a notification that said all essential services will remain open, as before, and all essential commodities and medicines would be available. Banks, ATMs, petrol pumps, hospitals and grocery shops will continue to function. However, all transport services — air, rail and roadways — will remain suspended until May 3. The detailed travel advisory from the home ministry of India as of 11 March can be found here. Furthermore, an additional travel advisory as of 19 March can be found here.

The situation with factory production

The textile and clothing industry employs over 105 million people and earns around USD$40 billion forex, aside from substantial revenue under GST and other taxes. The Confederation of Indian Textile Industry (CITI) has requested the government to immediately announce a relief package for the textile and apparel sector to mitigate the crisis being faced by the capital- and labour-intensive textile industry, post coronavirus spread.

The situation is Tirupur is no different, where Fair Wear member brands have 58% of their supplier base. The coronavirus outbreak has dealt a shattering blow to the garment industry in Tirupur, Tamil Nadu. The industry dealt with its first blow after its business was curtailed by the cancellation of massive export orders as coronavirus engulfed European countries, China and Italy. But now, with the pandemic spreading in India, its domestic business is also hampered.

Source: https://economictimes.indiatimes.com/industry/cons-products/garments-/-textiles/textile-industry-body-seeks-relief-package-to-mitigate-covid-19-pandemic-impact/articleshow/74678671.cms?from=mdr

The situation has now become worse as over 10,000 manufacturing units in Tirupur, which employs over 6 lakh people, are now struggling to maintain their workforce. Most of the workers here are migrant labourers.

Source: https://www.newindianexpress.com/business/2020/mar/23/coronavirus-outbreak-leaves-tirupur-garment-industry-high-and-dry-2120374.html

For daily wage earners, there is a complete lack of work. These people used to earn between 200 to 300 rupees per day, which is now not coming in. The small workshop workers have also been sent away due to work shutting down, with meagre amounts being given to them (one worker reported having received 800 rupees). Prices of food are rising due to short supply – in the face of no wages, this only compounds the problem.

Migrant workers were not able to go home due to shutting down of transport services, they are stuck in destination states or in transit.

All government and private offices (including garment factories) will remain closed until 14 April, except for those involved in essential services. This means no work for the garment sector workers and factories closed.

The textile industry alone has around 4.5 crore workers employed in textiles sector, including 35.22 lakh handloom workers all over the country.

Source: https://www.ibef.org/industry/textiles.aspx

The garment workers are equally affected by Covid-19 as the effect ripples across the labour market and causes economic backlash. Apparel brands are cancelling or postponing orders and delaying payments. This leads to suppliers laying off or suspending workers without any paid leave or social benefits. This is further pushing the vulnerable workers towards more social and economic disparities. Though the government has asked factories not to cut wages or benefits, small businesses and low-income households do not have the cash flow, balance sheets or savings to sustain the downturn in business or loss of income for a few months. Output losses and insufficient liquidity in many sectors have created a high risk of large-scale layoffs.

One report says that more than one fourth of India’s 69 million micro, small and medium enterprises (MSMEs) may shut shop if the lockdown extends beyond four to eight weeks, as a majority of them will have a cash crunch.

What are the government policies to support local businesses?

Industry demands

The textile industry body seeks a relief package to mitigate Covid-19 pandemic impact. ​​Apart from a reduction in the bank interest rate and extension of soft loans, the industry body has asked for a moratorium for the repayment of principal and interest amounts to the banks for four quarters (1st April 2020 to 31st March 2021). Further, they have asked for an exemption of all raw materials, dyes and chemicals, intermediaries, spares, accessories, etc. from anti-dumping duty and basic customs duty.

Source: https://economictimes.indiatimes.com/industry/cons-products/garments-/-textiles/textile-industry-body-seeks-relief-package-to-mitigate-covid-19-pandemic-impact/articleshow/74678671.cms

Additionally, Confederation of Indian Industry (CII) seeks 10-point boost plan from the government for the exporters effected by coronavirus. The short-term impact on exports has started showing up, with exporters facing a liquidity crunch as customers’ payments are not coming through and shipments of ready goods are not able to leave the factory or are lying at the port because of international lockdowns, The plan, drawn up by the Confederation of Indian Industry (CII), covers everything from extending the 5% interest subvention scheme to all exporters to one-time extensions of customs duty payments and filing bill of entry.

Policy announcement by Government of India:

  • Sab ka Vishwas indirect tax dispute redressal scheme extended to 30 June; no interest on payment made until 30 June
  • For companies with less than Rs 5 crore turnover, no interest, penalty and late fee to be charged on late GST return filing
  • Mandatory requirement of holding board meetings is being relaxed by a period of 60 days for the next 2 quarters
  • Last date for filing March-April-May GST returns extended to 30 June, 2020
  • Due date for issue of notice for all laws linked to duty compliance extended until 30 June
  • Aadhaar-pan linking extended to 30 June from 31 March
  • For delayed deposit of TDS, interest has been reduced to 9% from 18%
  • Relief for imports/exporters: Customs clearance now an essential service, till 30 June, 2020. It will be working 24/7.

What are the government policies and regulations to protect employees – the workers?

  • The helpline number for coronavirus : +91-11-23978046 or 1075
  • Concerned over movement of migrants causing the risk of community spread of coronavirus, the Centre has asked state governments to effectively seal all borders as the number of Covid-19 cases crossed the 1000-mark on Sunday. Source: https://www.indiatoday.in/india/story/covid-19-centre-asks-states-to-shut-border-as-india-reports-200-cases-in-one-day-total-tally-at-1-110-1661126-2020-03-30
  • The cost of wheat is Rs 27/kg, which will be provided at a subsidised rate of Rs 2/kg, while the cost of rice is about Rs 32/kg but will be supplied at Rs 3/kg through ration shops. All states have been asked to take food grains from the Centre in advance for distribution through the Public Distribution System (PDS). The government has decided to provide 7kg per person of food grains to 80 crore people under the PDS, which the world’s largest food security system.
  • Under the National Food Security Act (NFSA), the government is supplying 5kg of food grains per month to over 80 crore people at a highly subsidised price. Simultaneously, a big package is being prepared to help the poor, especially those in the unorganised sector. But this is to be announced in a phased manner.
  • The government’s ‘Atal Beema Vyakti Kalyan Yojana’, which provides unemployment insurance to workers who have subscribed to the Employees’ State Insurance (ESI) scheme, will cover such workers during the pandemic. The ESI is a self-financing health insurance scheme for formal sector workers in India managed by the Employees State Insurance Corporation (ESIC).
  • As scores of migrant workers move back to villages after losing their livelihood due to the ongoing lockdown, the central government has asked the highway authorities and toll operators to help out migrants who are walking home. Delhi, UP government are to start bus services to take migrants home.
  • 4 lakh rupees of relief to victims of the virus and those involved in relief operations
  • Treatment for Covid-19 is available free-of-cost for eligible beneficiaries under Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PMJAY) under various packages
  • On 26 March, the central government announced a relief package of 1.7 trillion rupees (USD$22.5 billion) to provide free food and cash transfers to the poor and vulnerable populations, and health insurance for healthcare workers, among other things.
  • States have been also told to ensure the timely payment of wages to labourers at their place of work during the lockdown period without any cuts.
  • House rent should not be demanded from labourers for this period. Action should be taken against those who are asking labourers or students to vacate the premises, the government statement said.
  • Delhi Chief Minister Arvind Kejriwal and Maharashtra’s Uddhav Thackeray, among other state leaders, asked migrant workers in their respective states to stay put and promised them food and other facilities.
  • The package, which could be announced by the end of the week, will be used to put money directly into the accounts of more than 100 million poor and to support businesses hit the hardest by the lockdown, the sources said.

    Click here to track the State’s response to Covid-19 in India. Below, you will find some of the state-specific response schemes.
  • Kerala – package of Rs 20,000 crores to address Covid-19 and subsidised meals for 20 rupees a plate, via 1000 hotels
  • Maharashtra – private sector has been asked not to deduct wages of workers for the period that workers go on leave
  • Delhi – free rations (increased by 1.5 times), doubling pension, free meals at night shelters – 72 lakh workers will be eligible for this. Hunger Helpline numbers have been announced amid COVID-19 lockdown. Full list is available here.
  • Karnataka – groceries to be delivered to homes of children attending anganwadi
  • Uttar Pradesh
    1. 1000 rupees each for 20 lakh construction workers (this might change with a new announcement)
    2. 15 lakh small cart owners, small shop owners and rickshaw pullers
    3. 1.45 crores to Antyodaya workers, MNREGA card holders, construction workers, small wage earners
    4. Advance pension amounts to be paid to 83 lakh wage earners
    5. Anyone previously not covered in this scheme can also avail 1000 rupees from this scheme
    6. All pending MNREGA dues to be cleared by the end of March
  • Punjab – 3000 rupees each for all registered construction workers
  • Andhra Pradesh – free rations to the poor and 1000 rupees per family
  • West Bengal – 200 crore total package:
    1. Free rice via ration shops benefiting 7.5 crore people
    2. 5 lakh rupees worth of insurance to 10 lakh people involved in health hazard areas
  • Assam – 2000 dollars relief fund for Assamese people who are stranded abroad
  • Odisha – 200 crore rupees earmarked for the outbreak
    1. Wages during production stoppages
    2. Layoffs when factory closed
    3. Social security, health insurance
    4. Testing and medical treatment for Covid-19
    5. Sick leave benefits
    6. If applicable, additional childcare support

Policy and schemes announced by central and state governments for specific social groups

Central government key policy announcement
Food security announcements:

  • 25 March 2020
    • Control room established in Department for Promotion of Industry and Internal Trade to monitor issues of internal trade, manufacturing and delivery and logistics of essential commodities during the lockdown period. Manufacturers, distributors, transporters, e-commerce companies facing ground level difficulties can complain.
  • 26 March 2020
    • Food supplies to 80 crore individuals who would be provided double of their current entitlement (food grains) over the next three months. These additional food grains are free of cost. Additionally, 1kg pulses will be provided (as per the regional preferences) for the next three months. All beneficiaries covered under the Targeted Public Distribution System (TPDS) i.e. Antyodaya Anna Yojana (AAY) and Priority Households will get the benefit.

Announcements for unorganised sector/migrant labour/low income families/farmers/senior citizens:

  • 26 March 2020
    • PM KISAN Yojana: The first instalment of ₹2,000 due in 2020-21 will be frontloaded and paid in April 2020, benefiting 8.7 crores famers.
    • PMJDY women account holders would be given ex-gratia of ₹500 per month for the next three months benefiting 20.40 crore women.
    • Gas cylinders, free of cost, would be provided for the next three months to 8 crores poor families.
    • Wage-earners below ₹15,000 per month in businesses having less than 100 workers, the government proposes to pay 24% of their monthly wages into their PF accounts for the next three months.
    • Senior citizens, widows and persons with disabilities (Divyang) will be provided with ₹1,000.
    • MNREGA wages would be increased by ₹20 with effect from 1 April 2020.
    • Limit of collateral-free lending would be increased from ₹10 to ₹20 lakhs benefiting 63 lakhs Self Help Groups (SHGs).
    • Employees Provident Fund Regulations will be amended to include the pandemic as the reason to allow the non-refundable advance of 75% of the amount or three months of the wages, whichever is lower, from their accounts. The beneficiaries are families of four crore workers registered under EPF.
    • A welfare fund for building and other construction workers is created under a Central Government Act. state governments will be given directions to utilise this fund to aid and support these workers to protect them against economic disruptions. There are around 3.5 crore registered workers in the Fund.
  • 28 March 2020
    • State governments and Union Territory administrations can utilise the State Disaster Response Fund (SDRF), to which ₹29,000 crore has been allocated for the next fiscal year, for providing food and shelter to migrant workers hit by the 21 day lockdown. Under the SDRF, whatever allocation there is in the current year, for the next year a total of ₹29,000 crore has been allocated to the states under the SDRF.
  • 29 March 2020
    • State/ UT Governments shall ensure adequate arrangements of temporary shelters, and food for the poor and needy including migrant labourers. Migrant people who went to their hometowns to be placed in quarantine for 14 days after proper screening.
    • All employers of industry, shops and establishments shall make payments to the workers at their workplace, on the due date without deduction.
    • Landlords should not collect rent from the workers – including migrants who are staying in rented accommodation – for one month.
  • 30 March 2020
    • NITI Aayog invited Civil Society organisations to help in comprehensive welfare of the migrants, support state governments and local administration for delivery of public healthcare/hygiene, assist local administration in identifying hotspots, depute volunteers and care givers to deliver services to the elderly, persons with disabilities, children, transgender persons and other vulnerable groups and ensure there is no discrimination and stigma against Covid-19 patients.
  • 2 April 2020
    • Disbursal of money under PMGKY for women in PMJDY accounts.

State government key policy announcement for welfare and specific social groups (food security, migrant/unorganised/low income families/farmers/senior citizens):

Most of the state governments announced measures such as free rations, pensions in advance, free treatment for the Covid-19 patients, cash incentives to white card holders to sustain during the lockdown period, door delivery of groceries, vegetables, milk, medicines etc.

  • E-commerce platforms have been allowed to deliver daily essentials.
  • Governments asked private employers to provide paid leave or work from home for the employees during the lockdown period and not to fire anyone. State/Union Territory Governments are to ensure that employers do not fire workers or give them less salary because of the lockdown. All workers including contractual and casual working in the public or private sector. Covers all establishments including plantations, factories, industries, malls, shops.
  • Invoked Essential Commodities Act 1955 to keep in check prices of essentials like groceries, sanitizers, masks.
  • Several states have issued orders to the landlords of healthcare professionals, hostel owners and PG owners not to coerce their tenants to vacate or charge rent.
  • Governments to ensure the provision of essential services related to food, grocery items, fruits and vegetables, dairy and milk products.
  • Shelter homes with provision to feed the homeless, migrants, labourer and the poor have been set up.
  • Monitoring unit constituted for motoring and facilitating movement of goods into the state and within the state.
  • A helpline is set up to address issues of stranded migrant workers, across all states.
  • Funds are allocated to help migrants from the state stuck in other parts of the country.
  • Set up relief camps along highways to provide food and shelter to migrant workers returning to their domicile states.

Specific Policy Announcement for Welfare of Specific Social Groups (food security, migrant/unorganised/low income families/farmers/ senior citizens) made by State Governments:

  • West Bengal
    • ICDS ration is sent to children’s homes –2 kg rice & potatoes.
    • 5 kg rice/flour to be available for free for the next 6 months (till September) from Fair Price Shops.
    • Social Sector pensions to be given in advance for 2 months.
    • New programme called ‘ProchestaPrakalpa’–daily workers in need will get ₹1000 as one-time relief.
  • Uttarakhand
    • Government bars collection of fees by private schools during lockdown.
  • Uttar Pradesh
    • Amount of ₹1,000 each will be given to 1.5 million daily wage labourers and 2.03 million construction workers across the state through direct benefit transfer (DBT). For workers who do not have bank accounts, efforts will be made to open their bank accounts as soon as possible.
    • Free food grains for the months of April and May in advance to more than 8.38 million widow, old age and handicapped pensioners.
    • For households not covered under NFSA, ₹1000 assistance will be provided.
    • Community kitchens are operational for needy daily wagers and needy.
  • Telangana
    • All white ration cardholders to get 12 kg rice and ₹1500 per person for buying other essential commodities.
    • Free lunch and dinner are provided to the poor and needy in the 150 Annapurna Canteens in the Hyderabad city.
    • Hyderabad Municipal Corporation launched a mega-collection drive of ration from the public to provide food to the needy and poor.
    • Each migrant worker to get 12 kg rice and ₹500
    • 145 Mobile Rythu Bazaar launched in the Greater Hyderabad Municipal Corporation area, Hyderabad to deliver vegetables at their doorstep for citizens.
    • More than 4 lakh migrant workers in Hyderabad & other parts of Telangana are being taken care of by the government in tandem with builders & contractors. All essential provisions & sanitation needs to be made available on their site of construction.
  • Rajasthan
    • Social Sector pensions to be given in advance for 2 months.
    • ₹1000 per month for families whose livelihood has been impacted by lockdown.
    • NFSA beneficiaries (ration card holders) to get rationed wheat free of cost in April and May.
  • Sikkim
    • ₹5000 one-time assistance to students stranded outside the state.
  • Tamil Nadu
    • Package of ₹1000 along with 15 kg rice, 1 kg dal and 1 kg oil to unorganised sector workers.
    • Eligible ration card holders will get cash assistance of ₹1000 and essential supplies free during April. To avoid overcrowding at Fair Price Shops, a token system shall be adopted for the issue of cash support and essential commodities.
    • Elderly and destitute to get cooked food at their residence.
    • Amma canteens to continue functioning in order to provide quality free food.
  • Punjab
    • CM asked all industrial units and brick kilns to commence operations with migrant workers if they have adequate provisions to accommodate them safely within the premises.
    • CM authorised Sarpanches to use Panchayat funds to help people in villages. Municipal funds at disposal of ULBs, they are empowered to buy medicine & food for urban daily wagers, labourers & poor.
    • CM announced distribution of 10 lakh packets of dry ration containing 10  kg atta, 2 kg dal and 2 kg sugar to daily wagers and unorganised labours.
    • These packets will also be available at the DC office for anyone not covered in the distribution drive.
    • Relief of ₹3,000 to each registered construction worker in the state through direct benefit transfer (DBT). A total sum of ₹96 crore has been earmarked for this purpose.
    • About 20 special trains carrying food grains (wheat & rice) were sent to help other states.
  • Odisha
    • All the students of SC/ST welfare hostels will be given three months’ pre-Matric scholarship as an advance.
    • Enhanced coverage of 5 lakh beneficiaries under the State Food Security Scheme.
    • Mid-day Meal coupons to the students for 3 months will be given in advance.
    • Express permission is given to all transport vehicles that carry essential goods to ply without any hassles.
    • Appointed nodal officer for migrant workers for each state.
  • Maharashtra
    • Wedding halls to be used as shelter houses for migrant workers.
  • MP
    • Appealed every state to provide food, shelter, security and healthcare to its people and that it will reimburse the amount.
    • All social welfare pensions for 2 months to be given in advance.
    • All labourers get ₹1000.
    • Tribal families to get 2 month advance payments done for their welfare/social security.
    • All students get money into their accounts for midday meals.
  • Kerala
    • Loans worth ₹2000 Cr through Kudumbasree.
    • 1000 food stalls across the state serving food at ₹20 per head.
    • Home delivery of midday meals to the school children.
    • Opened 4603 relief camps for migrant workers.
  • Karnataka
    • Free food through Indira Canteens for the poor.
  • Jharkhand
    • Government to open 350 khichdi kitchens across the state to provide food for the poor.
  • Jammu and Kashmir
    • Free insurance of ₹5 lakh for all residents of J&K on the lines of Ayushman Bharat.
    • Advance ration for April & May to be issued to eligible beneficiaries.
    • Two instalments of social security pensions to be released.
    • 1 month rations for midday meals to be given in advance to parents of all eligible children.
    • Wages for daily wagers to be released.
    • Amount of ₹1000 to be given to all registered construction workers.
  • Haryana
    • Website launched for home delivery of essential commodities to people in the state.
    • No interest to be charged for the extended period as farm loan payment deadline extended.
    • Labourers registered under the Construction Labour Welfare Board would be paid ₹1,000 per week for the duration of lockdown.
    • Those workers who have registered with the Haryana Board of Construction Workers but have not registered under MMPSY would be provided with a sum of ₹4500 per month on a weekly basis starting March 30, 2020.
    • Daily wagers such as mazdoors, street vendors, etc. may register online on a portal by the Deputy Commissioner of the district. All such persons who are found eligible and have a bank account would be directly provided with an assistance of ₹1000 per week for the duration of lockdown.
    • All health workers and frontline workers involved in combating the pandemic would be provided accident insurance (ex-gratia) of ₹10 Lakhs.
  • Gujrat
    • For non-Gujarati people to procure ration from Fair Price Shop, ration card isn’t mandatory.
  • Delhi
    • Ration quota per person increased by 50% and the additional ration is free of cost (for one month).
    • Pensions for differently-abled, widows and elderly doubled for the month of March 2020.
    • ₹5000 given to every construction worker of Delhi.
    • Students of 11th and 12th get allowance for purchasing data on their phones to continue their classes. Teachers were asked to be available to the students on call.
  • Chhattisargh
    • Electric power metre reading for low pressure consumers under lump sum scheme with half the rate for two months.

What are local organisations doing to support and protect workers?

More than 90% of the country’s workforce is estimated to be in the informal sector. The Economic Survey 2017-2018 said that 87% of the firms in the country, representing 21% of total turnover, are purely informal, outside both the tax and social security nets. The crisis has led to a mass exodus of migrant labour to villages.

Source: https://www.livemint.com/news/india/coronavirus-pandemic-puts-india-s-informal-workers-in-the-firing-line-11584902659516.html

Organisations like National Association of Street Vendors of India (NASVI), which works for advocacy of livelihood rights and All India Unorganized Workers Congress, part of the Congress party, is demanding emergency funds to aid for at least two months.

What have been the responses and requests of business associations to support the industry?

See response to the second question.

Other initiatives can be found below:
The Mahindra Foundation will create a fund to assist the hardest hit in our value chain small businesses and the self-employed. The owner would contribute 100 per cent of his salary and gradually increase collections in the fund to assist small-scale businesses.

What are international brands doing to support suppliers and protect workers?

There is little information about this currently.


Relevant links for more information

Lockdown effect: Lakhs of workers in Tamil Nadu’s garment industry lose 3 weeks’ wages despite government orders
Platform for investor queries on Covid-19
Government of India issues lockdown guidelines
Ministry of Health – Coronavirus helpline and state-specific information
Ministry of Health – FAQs on Covid-19
Ministry of Labour and Employment advisories on supporting employees and workers
Ministry of Textiles
Clean Clothes Campaign coronavirus live-blog