YS Jagan writes to Modi on COVID-19 Lockdown

Amaravati: Chief Minister YS Jagan Reddy wrote a letter to the Prime Minister Narendra Modi on Monday, with 8 important points.

While appreciating the importance of the lockdown dueing the COVID19 difficult times, he stated that, the lockdown, however, has severely impacted the pace of economic growth by affecting demand in the Country and causing supply disruptions.

Jagan suggested certain measures to ensure the wheels of economy move at the least, if not roll and expressed fears on increase of unemployment and downfall of economy. He worried more over the agriculture and industrial sectors performance in the state and the likelihood of shutdowns of companies.

The lockdown caused immense supply chain disruptions, posing several difficulties in the marketing and transportation of the state's agricultural, horticultural and aqua produce. As a consequence of lockdown, only 50 percent of the markets for these produce are operating all over the country and further, these markets are operating only at 20-30 percent of their capacity, hampering the marketing activities leading to crisis in the case of banana, maize, etc. and would be affecting all other agricultural products when they are ready for harvesting.

All this has threatened the livelihoods of a major section of the state's population and farmers are the most adversely affected.

The Aqua-sector as fish and prawns which were ready for harvesting in the past one month could not be marketed due to closure of domestic markets in Assam, West Bengal, Bihar and UP and also due to shortage of demand in the United States of America and European markets.

Owing to the lockdown, several challenges have emerged with respect to the transportation of the goods. Fear of vehicle stoppage, confiscation of goods, inadequate fuel and several other problems have reduced the transportation activity.

Only 25 percent of the vehicles engaged in transportation are operating now and that too at prohibitively expensive prices as two-way load is not assured. He requested that steps be initiated by the Government of India to enable seamless transportation and marketing of all goods of all industries including agricultural produce across the states along with opening up of the Agriculture, Horticulture and Aqua Markets across the Country.

He requested that efforts be made by Commerce Ministry to open markets in other countries.

Chief Minister said that several godowns in the State operated by FCI/CWC have currently reached their full capacity and would not be able to store the produce from the Rabi harvest, causing severe hardships.

He suggested that necessary instructions be given to the concerned departments to enable clearance of the stocks available currently in godowns or create additional space on an immediate basis.

The industry sector and MSME sector have also been adversely impacted. MSMEs provide employment to more than 11 million people. About 94 percent of the MSME units in the state of AP are locked down. Of the total 1,03,986 factories in the state only 7,250 are working the rest are shutdown due to Lockdown. The impact on businesses is likely to have a cascading effect across the value chain which may continue even after the lockdown restrictions have been eased owing to global slowdown in demand.

Contractual, wage labour will face loss of jobs, leading to unrest and consequently lowering of their purchasing power. Consumer goods, cement, steel, garments, footwear, utensils, automotive segments will see a major direct impact owing to diminishing liquidity and cash-flow constraints on working capital.

While companies are forced to incur fixed cost even in shutdown mode, how can they pay for salaries, wages without functioning on one hand and fixed costs not coming down on the other hand.

On the basis of the extent of the spread of COVID-19 and the assessment of risk for future spread of infection, the State should be classified into three zones, Red, Orange and Green zones.

This approach would ensure that the risks are adequately mitigated and at the same time, the adverse impact on the Country's economy is minimized.