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COVID-19 lockdown woes: Labour desperate to go back home

Though essential goods and services are still being delivered, the massive dislocation of workers as a result of the surprise lockdown has left a huge question mark on the possibility of restarting factories.

April 30, 2020 / 12:46 PM IST

Even as measures to restart the stalled Indian economy from May onwards are being debated, serious labour shortages are being predicted. And as stranded workers are being allowed to go home, corporate heads are scratching their heads on how to restart the business.

Obviously there are operational challenges, but we are functioning. Labour is not easily available, said the CFO of a key infrastructure utility earlier this week.

"We are offering incentives, but the workers desperately want to go back home. As soon as bus and train services start, my hunch is that many will go back. It will be difficult to get them back for a few months given the fear around the pandemic," says the CFO who did not wish to be identified.

Though essential goods and services are still being delivered, the massive dislocation of workers as a result of the surprise lockdown has left a huge question mark on the possibility of restarting factories and workshops with any semblance of normalcy.

The real test will be when non-essential businesses are allowed to start, especially the labour and transport-intensive ones, says Yogesh B. Mathur, former CFO and restructuring expert.

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It is a very unusual situation where there is a conflict between your personal and family health and that of earning your livelihood.

Migrant labour which fuels large sections of the Indian economy is at the forefront of the economic pain that COVID-19 has inflicted. Devoid of work and wages, often stuck in accommodation which prevents social distancing, these daily wagers bore the brunt of the lockdown as the transport services stopped completely.

This disruption, however, does not seem to be temporary for a variety of reasons -- genuine health concerns, fear and real logistical barriers. Many businesses are wondering if the term 'Vaishvik Mahamaari' has caused a climate of unreasonable fear.

Views have been expressed on the pandemic. Perhaps more needs to provide a clear signal to workers to rejoin work, says the CFO.

Others worry about the continued sealing of state borders which will prevent the resumption of genuine business activity. States are unlikely to allow free movement across borders anytime soon.

For plants and factories whose workforce comes from a catchment area spread over neighbouring states, resumption of work will not be easy. The pharma cluster in Baddi is an example.

In China, where a similar lockdown lasted over 70 days, many workers had gone back home for their Lunar New Year holidays at the start of the lockdown. Later as activity gradually resumed, companies shared workers between themselves to ensure delivery of essential goods and services as the lockdown was extended.

For instance, Walmart Inc apparently tied up with close to 160 companies in the food and hospitality industry for worker-sharing arrangements to staff close to 400 of its stores in China.

Such worker-sharing arrangements may well be doable and a win-win solution as long as skills are transferable and there is no conflict of interest. They may need to be facilitated, says Mathur.

In any case, the risk is all yours if there is any infection once you start, so businesses will step forward only very cautiously, says a consultant to the pharmaceutical industry.

As a partial easing of the lockdown occurs at the beginning of May, there would be greater clarity on the shortages and how companies intend to cope with an unprecedented labour shortage.

Shalini Dagar
first published: Apr 30, 2020 12:26 pm