Day #18: Rural life and small enterprises during a Pandemic...

6th April 2020: I have had over the past 3 days been sent upward of 30 articles on the post-Corona pandemic  economic recovery and impact on rural India. I have read some of them and intend to read as many as possible, while ideologues, alternative thinkers, radical economic ideators (including yours truly) talk among themselves of making things differently, the corporate stake holders of the mainstream economy that is highly influential, is talking about a post-Pandemic reboot of a massive scale which will revive their business to 'usual' level quickly.  Governments are being provided with advisory, consultant firms are releasing reports, people are doing webinars and proposals are being prepared for the governments to consider. Reviving the rural economy is mentioned in many places alongside the revival of the micro/small segment of enterprises for the revival of the economy and ensuring that there is cash flow at the lower rungs of the pyramid.  Both the corporate lobby and the alternative thinkers sound desperate and have  several ideas. Some of these sound dangerous while others merely impractical and in between somewhere there are always many brilliant ideas. As I have always tried to understand the fundamentals first, I felt it makes sense to get some real picture from the ground. 

Today I launched a couple of interactions with people who are part of rural economy and MSME economy in Tamilnadu.  I had been planning to launch such a podcast for quite some time and since the beginning of the lockdown it was to happen, and it did today. The interactions have to be in Tamil for obvious reasons. Here I summarize the interaction that I had today that are available as two episodes in the podcast available here. 

Talking to my friend, a village elder and keen observer of society around in one of the southern districts of Tamilnadu, his summary of the village life is as below  -

***Only commercial farmers have been impacted by the inability to reach the market, very small farmers are able to distribute their produce in the locality itself, people go in search of small dairy farmers for their dairy needs, so milk is locally getting redistributed

***Local labourers, who are primarily construction labourers are all stuck without work and lose their earning, but, seem to be confident that  construction industry will recover once the lockdown is over, they are all looking forward to going back to work on 15th morning

***Women who work in factories have all lost jobs, they think everything will be alright once the lock down is over and the factory will start production as usual and they can go back; they are apprehensive about how long the lock down will extend, but, not perturbed much

***Many people from here that migrated as labourers to other parts of the country are stuck wherever  they are and similarly there are people who have migrated  to these parts and they are stuck

***Children are enjoying the lock down as this is like a very long holiday for them and there seems to be more activity in the streets than normal in the village because so many kids are hanging around here all the time

***The local body seems to be doing its bit of spraying some form of cleanser on all houses, "to drive away the virus" as they claim and village health nurse visit houses with masks checking on people. It gives an impression to the villagers that the government is doing something and it is serious this time; the outreach is good, this will provide political mileage to the incumbent government (we are due for elections soon)

***People are not worried that they will contain the virus, most youngsters are careless because they think only the oldies will catch it, the elders are turning philosophical - but most people don't believe they will every be infected

***Despite a lock down liquor is available aplenty in the black market at a premium cost

***People have taken positively to the Prime Minister's suggestion to light a lamp yesterday, it gave them something to do and the participation seemed to have given some sense of hope

Later talking to another friend who is an entrepreneur, he manufactures finished leather products from an unit he has managed for over a decade, employing more than 40 member staff in  a peri-urban part of the state. His description of the impact - 

***Orders from big customers stopped or were asked to be put on hold weeks before the actual shut-down. Not only have orders disappeared for the current quarter, but, order for designs which normally they make as samples for the next quarter also have stopped, indicating a longer time before things recover 

***Though he is doing only 15% exports and remaining domestic market, the lack of dispensable income among the  consumers market in the coming months, will mean, his products will not find any takers and customer's may disappear

***He has given his staff part salary for the month, he feels it is his responsibility to take care of them. They are all permanent staff, all of them are being paid 50-60% of their salaries and promised of the same in the coming months

***International market have crashed all over, in his business, when one sector of the international market crashes normally there are other sectors that can work, but, currently it has crashed uniformly all over the world

***just the first week of the lock down meant INR 7000 crores worth of business gone for the sector that employs over 4.4 million people in the country

***He has thought about diversifying the product range by producing for the healthcare sector which needs several products just now, but, is apprehensive that the require raw material supply is not available in India just now 

***Some time back the govt. had brought down the export incentive  drastically for the sector, such drastic reduction results in sudden drop and in situations such as now derives the industry of any buffer

***If somehow the markets don't improve in the next 4 months, for as many as 300 units like him that  could be employing more than 4000 people put together only in the MSME leather sector may find it very difficult to survive

***He thinks it is his duty to support his staff, but, not sure how much longer he can do so if the markets continue to not develop

Another entrepreneur with whom I have been having several conversations, he has a cloth bag manufacturing unit, slightly bigger than a cottage industry as it employs about 15 people fully and provides part employment to another 20 people. 

***The entire business works on job work basis, whenever there are events / seasonal festivals / events, they get orders and the money from the orders sustains the business and pays  for the staff

***Currently all events and sales have stopped, so there are no orders and there are none likely currently

***They had tried to diversify and manufacture face masks using cloth, but, the bulk buyers need more than a cloth for making masks and the material for making them are not available currently; small local sales does take place

***The promoter has ensured that the daily wage earning staff members are paid enough to survive and they are supported through materials to ensure their sustenance

***If the market doesn't pick up in the near future, sustenance of the unit will be very difficult and these people can survive doing something else, according to him, it is poorer families where both the partners are dependent on service sector or other industries which are impacted severely (he mentioned the case of husband being a driver and the wife being a tailor)

***While everyone is aware of the challenges of the situation, it hasn't resulted in severe stress on people as yet, however, this may change fast if things don't return to a semblance of normalcy by end of April

While the statements of despair that the  economists urge the governments to do something, the mixed response from the villages and the small entrepreneurs segment indicates, that there is a certain elegance in the contentment that people seem to exhibit. A contentment that may be based on ignorance. But then, the entire scientific community seems to be just discovering the  challenges of this virus every day. Yesterday's pronouncement sounds like ignorance today and today's may sound absurd tomorrow. So, the rural ignorance doesn't seem alone in the world. 

Economic revival can be hard on people and time consuming, many entrepreneurs may not survive and many will have to recast themselves completely. But, there is no reason to lose ones' capacity to stay content with simple things in life, relish locally grown food, spend time with extended family and neighbours and celebrate life. These seem to be a good end goal for any 'developed' society to aim to achieve.  

Podcast is available in this link - https://anchor.fm/ramble2020