Bhubaneswar: The economy is battling the virus too

With the Centre’s new guidelines to slowly kickstart the economy, Odisha, too, has announced partial lockdown relaxation. But the problems that formal and informal sectors here face now is representative of what all states will have to tackle post May 3rd.

Odisha is primarily a rural economy, with 83% of the state’s population living in rural areas as per the 2011 census, and dependent for their livelihood primarily on agriculture and allied activities. Not surprisingly, the state’s first steps have been to open up activities in agriculture, rural housing and MGNREGA work. Around 20% of Bhubaneswar’s daily wage labourers working in both the formal and informal sectors have returned to their villages while those left behind remain dependent for their survival on the cooked food and rations, besides groceries and vegetables being provided by the city authorities.

Daily wage labourers who would earlier sit at key street corners of the city, to be picked up by a contractor, have been jobless for nearly a month now. Some of them even today can be seen walking on the national highways towards their village as the possibility of returning to their old lives gets remote by the day.

The private sector has come up with a long list of demands to be able to restart their closed units and pay their workers. The hotel industry, for instance, which has been hit particularly hard. “My staff strength is 1200 and all of them have gone to their villages as hotels are closed,” said J.K. Mohanty, Chairman of Hotel and Restaurant Association of Odisha. “It is difficult to pay them salary if hotels remain closed. Cyclone Fani had devastated hotels of Puri and Bhubaneswar and neither the Odisha government nor the centre helped us through that. Now, even if I open the hotels it will be risky as there will be no business and I will have to give food to the staff,” said Mohanty, who owns luxury hotels in Bhubaneswar and one resort near Chilka lake.

Industry demands

According to Mohanty, Odisha has 388 standard hotels including lodges and small hotels, a majority of which are in Puri. In all there are around 1800 hotels in the state. The Hotel Association has asked that banks exempt interest for the MSME sector for six months and charge 50% interest on term loans and working capital for 12 months and a six-month GST waiver besides other tax rebates. But the most important demand is that the government should reimburse employees’ salary for hotel employees across the country for at least three months. The Centre should allocate Rs. 9000 cr towards revival of the hotel industry, the association has said.

Every segment has similar demands. Private bus operators, whose 14000 private buses are lying idle, too have staked claim for government help. “There are 56,000 employees and workers dependent upon private bus operations,” said Bus Owners’ Association General Secretary Mr Barada Acharya.

In other industry segments, Odisha has 4500 industrial units, ranging from steel plants to small stone crushers. Of these, MSMEs number about 4000, out of which 3500 units were running before the pandemic. Now, only around 500 are operating. “Of the of big industries only steel, aluminium, power plants besides Indian Oil’s refinery and PPL fertilizer plant at Paradeep are running with reduced capacities,” said Ramesh Behera, Deputy Director, Factories and Boilers, Odisha. Around 3.5 lakh workers have been affected by the closure of other units.

Bhubaneswar Municipal area alone has 450 units. Even before Corona, 40% were closed. Now, only about 20 units like milk chilling plants, railway coach factory and some bottling plants are working. Contractors employed by big industries are not paying wages to their workers, nor are they giving them food. Recently, some migrant labourers from Jharkhand working in Jaharsuguda district of western Odisha for a contractor attached to the Vedanta group went without food for three days before contacting the Jharkhand government which took it up with Odisha government who finally got them some relief.

IIT Bhubaneswar set up at Argul village some 20 km from town, has similar issues, admitted a government officer. The construction contractor had been asked to feed the 1800 labourers under him. But with his income disappearing, the contractor was unable to do so and the government had to ultimately step in with relief. Similar is the story with all segments, including media, where employees have been sacked. Officials admit that the government should not expect the private sector to give free food to idle labourers.

Salaries uncertain and unpaid

Small entrepreneurs, in particular, are in a precarious position. “Many small units are not paying salary after COVID,” said S. Patnaik, a contractor from Angul district town who has 150 regular staff and 100 daily labourers who are sitting idle since March 21st. Patnaik has paid them full salary for March but has decided to pay half salary to regular staff in April and no payment to the idle daily wage labourers, though he is providing food to all. “If the situation does not improve, I will not be able to pay even the half salary in May,” Patnaik said.

Just about every such small employer Citizen Matters spoke to said the same thing. Like Arun Kumar Satpathy, a contractor of Berhampur, the main south Odisha city, who said he is not in a position to pay his 150 workers as the government has not cleared his bills. Many of his workers have returned to their villages.

Volunteers distributing food to the poor in Bhubaneswar. Pic D K Mahapatra

Utkal Chamber of Commerce and Industry, the apex body of the state’s industries, has written to Prime Minister Narendra Modi requesting that “industries may be allowed to pay 50% of wages based on last wage payment and balance 50% on deferred basis to be paid in next three or four months.” Its President Mr Ramesh Mahapatra argues that wages should be paid at a reduced rate for at least six months, similar to the 30% reduction in the salary of MPs and ministers. Under the circumstances, May salary for a majority of employees is uncertain.

Most private employers face the same quandary. If lockdown persists after May 3rd, none of their employees, regular and contractual, are likely to be paid. Many construction companies from outside Odisha working in the road sector in the state, particularly national highways, are not paying bills of subcontractors and have left them and their workers in the lurch. Not surprisingly, even labourers working in central PSUs like Nalco have gone back to their villages.

In Bhubaneswar, most security guards manning apartments have left for their villages. In Vipul Garden, a posh apartment complex where many VIPs stay, out of 150 security guards only four remain. Even they are not getting regular salary. Vaibhab Choudhry, whose K-1 security agency at Bhubaneswar has 12,000 employees said 8000 of them have returned to their villages while those remaining are not being permitted by the police to report for duty.

April 26th, the auspicious day of Akshyaya Tritiya, is traditionally observed when Odisha farmers start sowing paddy. In the first phase of lockdown, farmers lost out heavily as their crops died in the fields due to movement restrictions. But in this second phase, it is expected things will improve for farmers and consumers. “A roadmap has been prepared to ensure smooth and uninterrupted agriculture related activities in the state amidst lockdown,” said state agriculture minister Arun Sahu.

“Since traditional weekly haats in villages and towns, where farmers and small traders sell food grains, vegetables and fruits are closed, authorities have earmarked areas on the roadside for sale of fruits and vegetables,” said Shefeen Ahmed, DIG, Koraput. “At Bhubaneswar old markets like Unit-1 haat and Unit-4 haat, two of the city’s biggest markets for vegetables and groceries, with Unit-4 also being the largest fish market in the city, have been closed since the beginning of lockdown. Vegetable sellers are allotted roadside places to sell their items mostly in the morning and evening. We have also allowed roadside dhabas and some hotels in towns to sell cooked food in packets.” Ahmed oversees south Odisha’s undivided Koraput and Kalahandi regions, which have a Maoist problem. Kunduli, the largest vegetable mandi of south Odisha has been closed for some time now.

In Bhubaneswar’s Master Canteen square, located at the city centre facing the main rail station, the book market selling books has remained closed since March 24th. “This is the time when students and their parents come to buy textbooks, notebooks for writing and other requirements as the academic year starts,” said Mahima Prusty, owner of Dhara bookshop. “But we are not allowed to open our shops. All our helpers are sitting idle. But we have paid them salary for March. Next month also I will pay because I have to retain my staff, though my income has stopped.” All educational institutions in the state are closed till June 17th.

Illogical guidelines

While the Centre’s guidelines allows self employed people like plumbers and electricians to ply their trade, they are unable to do so as the shops that supply their requirements are closed. Avimanyu Bhatt, an electrician who earned a living doing small electrical works in homes remains unemployed. “Even if people call me, I cannot help as I am not getting parts as shops are closed, so how can I replace a switch or a bulb,” asked Avimanyu.

Job losses have forced many people into alternative means of livelihood. Masons, auto drivers and mobile phone service people are selling vegetables on the road side, which is the only option currently available to them. Some enterprising tea sellers are plying their business in a clandestine manner.

Pattnaik’s ambitions of promoting Bhubaneswar as an IT destination has also taken a corona hit. The city has around 100 IT companies, big and small, which employ around 50,000 people directly and indirectly. But the work from home directive is causing problems. Ranjan Mohapatra, promoter of Aashdit Technologies which has 60 people in its payroll, said though all staff were working from home, they faced problems with power cuts and low internet speeds in their homes.

However, none of this has deterred Naveen Patnaik from clearing six industry proposals worth Rs 9000 crore during the lockdown.

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