MBA- 204 NAME- SOUMIK BHATTACHARYA

Q.1. “Environment protection is fine, but this crisis may lead to long
term employment crisis.” –Justify the comment with suitable examples from
at least two industries.

Not all the environmental consequences of the crisis have been positive.
The Covid-19 pandemic has impacted economies around the world like no other event that
experts can recollect since the Great Depression. Some of the strongest economies around the
globe are struggling to cope with the situation in the wake of an unprecedented demand shock
and a shutdown of all key economic activities that drive growth.
India, too, has been hit hard. Global rating agency today slashed India’s GDP projection for
FY21 to 0.8 per cent. The Covid-19 pandemic has been a huge blow to India, especially since
many sectors were already facing a crisis when the virus storm hit.
The virus not only accelerated the crisis but also ended the good run that some sectors were
enjoying. Adding to the worries in a steep demand shock that experts say classified as a long-
term worry, citing uncertainty in the post-pandemic landscape.
If not all, key sectors that make up a larger portion of India’s GDP have been taken completely
or partially out of action. Reports of job losses, unpaid leaves and other concerns are being
reported on a daily basis from such sectors.
CMIE data shows how unemployment in India spiked in the month of April. The situation is
expected to worsen if the situation shows no improvement over the next few months.
Many sectors have appealed the government to ease some restrictions so they can at least resume
business or grant some relief so they can at least pay wages to their employees.

MSME Sector
The Micro, Small and Medium Enterprises (MSMEs) are literally the backbone of all Indian
sectors and often engaged in manufacturing and export activities — two key drivers of the Indian
economy.
Today, almost all MSMEs are out of action due to the lockdown, chocking all production
activities at major firms across sectors. There are several reports that indicate how MSMEs are
reeling under crisis and have no money to pay their employees.
From leaders to experts and industry bodies, everyone has appealed the government to increase
its relief package for the MSME sector, which contributes to over 30 per cent of India’s GDP.
It is worth mentioning that a majority of the small units may have to shut shop if they do not get
a relief package soon. The government is planning to release Rs 20,000 crore relief package,
divided into two funds, for helping MSMEs.
Describing the risks MSMEs face, the director of a firm that provides integrated services for
MSMEs told India today.in about the current sector outlook and the challenges.
Due to this lack of trade and shrinking sales, MSME's are feeling the burden of loans,
repayments, GST filings. Even after getting support from the government, many of them are
almost on the verge of losing their control over losses and unable to generate revenues as well
and fighting for their survival. It will be very important for the government to take initiatives and
announce more relief packages for MSME's and measures.
Saying that MSMEs will enter “uncharted territory” after the lockdown ends, he urged the
government to provide cash infusions that allow MSMEs to give workers jobs and buy raw
materials.
The government will also need to increase the insolvency limit for SMEs and MSMEs to 1 crore
from 1 lakh. Most businesses today are not earning revenues; hence they cannot meet their
obligations to creditors.

Aviation Sector
The crucial aviation sector that connects nations across the world is witnessing a flurry of
layoffs and pay cuts. Some workers have been asked to go on forced unpaid leaves by aviation
companies, who have been hit equally hard as the tourism and hospitality sector.
Each day, there are reports of global airlines announcing furloughs or layoffs as operational
strains deepen in the wake of the lockdown.
CAPA India, a leading travel and tourism consultancy firm, said last in a report last month that
global aviation activity has sunk over 66 per cent in the wake of the Covid-19 crisis.
“In India, the decline in aircraft movements has been even more dramatic. With the exception of
a handful of cargo and repatriation charter flights, India’s skies are largely empty,” the April
2020 report said.
Since the report was prepared before the lockdown 2.0 was announces, the effects on the sector
may have amplified.
It fears that the situation in the post-virus setup would remain pretty much the same for the
aviation sector.
“From a point of complete suspension of travel, recovery is likely to be slow. Demand will be
suppressed due to economic dislocation; slow or even negative GDP growth; broken supply
chains; low consumer confidence; and concerns about lingering outbreaks of COVID-19,
especially if travel insurance companies refuse to provide cover for associated medical expenses
or travel disruption costs.”
The sector, like the travel and tourism segment, is also in urgent need of financial help to support
employees.

In such a scenario, the government could announce a job security scheme that covers certain
employees, similar to what some countries including the UK have done. While there are the five
sectors that need urgent help, the outlook of other sectors in India are also deteriorating.
A larger job security scheme for those who have been laid off could be the only way to protect
affected citizens.
Q.2.Discuss the future of India’s agricultural industry based on the current
situation.

COVID-19’s economic implications have once again catapulted agriculture into the
mainstream discourse. The reverse migration of labourers to India’s hinterlands is having a
differentiated impact across regions. While agricultural operations in the well-endowed
regions are about to suffer, the hinterlands will have received an excess supply of labourers,
throwing up new challenges and opportunities. Economists have delineated agriculture’s
major roles in economic development, broadly in terms of contributions like products,
markets, factors and foreign exchange. Product indicates supply of goods like foods and
several raw materials (like cotton) for the industrial sector, while absorbing labour. This is the
most critical contribution. The market drives demand for industrial products. Factor mainly
refers to the form of supply of labour and capital for non-farm sectors. The foreign exchange
contribution of agriculture is in terms of exports of agricultural commodities.In India, these
contributions have become more prominent during phases of technology-aided growth, visible
in all sectors such as crops, livestock and fisheries. And due to their scale and magnitude of
impact, they are broadly described as revolutions. Examples include the green revolution in
crops, white revolution with dairy and blue revolution with fisheries. Notwithstanding the
many lacunae in this model, India is today a global leader in their production.

Agriculture in practice

The agricultural sector gained a respectable place as an agent of economic development only
after the success of the green revolution in developing countries. This is mainly because of
several perceived shortcomings of the agricultural sector, such as its high dependence on
natural resources to generate low-value products and susceptibility to economic fluctuations.
Other reasons included low price, income elasticity of demand, poor linkage with other
sectors and its extensive nature of cultivation.However, new agricultural technologies helped
negate these arguments because they were scale-neutral and input-intensive. Agro-processing
has now emerged as a major economic activity worldwide. The role of agricultural growth in
lifting people out of poverty is also well-recognised, and rural infrastructure and agriculture
research are key drivers of this.

India’s agricultural sector depends on migrant labourers for several operations. Now, an
estimated 50 million migrant labourers (of India’s 140 million) are expected to have returned
to their native places from cities following the nationwide lockdown from March 24. They
account for about 11% of the non-self-employed labour force. Many migrant labourers,
mainly from eastern states, are working in agricultural fields in the country’s west and north.
They are also significantly employed in  marine fishing, post-harvest activities, managing
livestock, in marketing, and in the creation of agricultural infrastructure.

It appears that the migrants’ return is having a negative impact on agriculturally developed
regions like Punjab, with the proximate cause being the harvest of important rabi crops like
wheat and mustard, resulting in a higher production cost. If the lockdown continues without
adequate mitigation efforts, even the kharif crop could be affected. Unless compensated for
the loss of labour force, many marine fishing and fish processing activities will also be
impacted.Another fallout would be the reduced capacity of the sector to generate savings,
affecting demand for inputs like fertilisers, pesticides, farm machinery, etc. Further, demand
for other industrial and consumer goods would be affected as well, with ramifications for
industrial growth. Ensuring sufficient flow of institutional credit to agriculture and small-scale
industrial sectors is of critical importance now.While labourers who had migrated to cities
were instrumental for urban development, their own welfare was largely neglected.   The low
credit-deposit ratio in rural areas also helped develop cities. However, the backward linkage
to India’s hinterlands and rural areas is weak. This requires several mitigation strategies; a
long-term one is to develop rural areas by ploughing resources back and increasing labour
productivity.

Reverse migration due to COVID-19 provides an opportunity for hinterland administration to

engage the returned labourers in gainful employment, and the sole short-term option is to
leverage the potential of agriculture. Especially labour-intensive sectors like livestock,
fisheries and food processing have not developed over the years, and the labourers who have
returned can be used to reverse this trend. Labourers can also be involved in creation and
revamping of rural infrastructure (both farm and non-farm), godowns, water management and
in food and fodder processing. The labour has to substitute for the probably reduced input
application in agriculture to help maintain the production level, resulting in increased factor
share of labour in the agricultural sector.

However, intra-household food insecurity is better addressed by generating awareness and

targeting women and children who are out of anganwadis now. Income transfer measures
could also be very helpful in reviving rural demand. Activities under the Mahatma Gandhi
National Rural Employment Guarantee Act should be promoted in this context.Long-term
strategies should be qualitatively different, focusing more on other sectors. Nonetheless, agro-
based activities and enterprises would be a key element. Improving the labour and land
productivity would be a critical strategy. For this, changes in the organisation of land, land
and water development, food processing and value addition and rural industries will be
important. Models that harness economies of scale in rural areas and mass absorption of
labourers need to be evaluated and adopted. The Kudumbashree model of Kerala is worth
examining in this context.
COVID-19 could reinvent the importance of the agriculture sector as the one on which our
labour force can fall upon at a time of crisis. Reviving this sector will be the key in the post-
COVID-19 phase of the Indian economy.

Q.4.Highlight the impact of Coronavirus crisis on India’s fishery export

industry.

 Fish export from India, the world's fourth largest exporting nation, is likely to decline by 5-10
per cent in 2019-20 due to demand compression in the wake of COVID-19 crisis,
Union Fisheries Minister Giriraj Singh said on Tuesday.
The country had exported fish valued Rs 46,589 crore during the 2018-19 fiscal. The US, Middle
East, UK and China are main export destinations for fish.
On number of COVID-19 positive fishermen, the minister said the Centre does not have a
separate data, but would collate it from state governments.
"As per the latest inputs, there is not much impact on exports. There would be maximum 5-10
per cent fall in exports," Singh told media while sharing information about the new scheme
Pradhan Mantri Matsya Sampada Yojana (PMMSY).
A final report on export status is expected in June. There is a gap of 3-4 months after fiscal year
to collate the fish export data.
The shipments were affected during initial days of the nationwide lockdown clamped to fight
COVID-19 disease. But the situation began to improve after the government exempted fishing
activities from the lockdown rule from mid-April onwards, he said.
The shipments to key destinations, including China, are happening now, Singh added.
A senior Fisheries Ministry official said that sluggish global demand because of the lockdown in
some countries has impacted the country's exports. But, now the situation has begun to improve
and normalcy in exports are expected soon.
Asserting that there is huge potential to increase India's fish exports in the coming years, the
minister said the government plans to promote export of seaweed and ornamental fish.
Seaweed and ornamental fish cultivation will be promoted through self help groups in the
coming days, he said, adding that the Centre is working in 2-3 states on seaweed.
The global health crisis caused by the outbreak of Covid-19 has disconcerted Indian seafood
exporters, who ship out stuff worth $7 billion every year.
Shipments to the US, India’s largest market for marine food, are down by over 50 per cent since
the outbreak of Covid-19 and the consequent lockdown.
With annual export volumes of 280,000 tonnes, India is the largest shrimp supplier to the US,
accounting for a 40 per cent share of the latter’s imports by volumes.
Also, no fresh orders are forthcoming from other key markets like the European Union, Vietnam,
and Japan, a leading exporter said.
“After the outbreak of coronavirus, we are unable to bag fresh orders from
export markets. Seafood exporters are trying to meet earlier orders. Even some of the pre-booked
orders are getting cancelled as countries are acting with more caution to contain the spread of the
contagion,” said an Odisha-based seafood exporter.
Fresh seafood production in Odisha has come to a halt since the lockdown announcement
because the state authorities have not permitted the operations of processing plants.
Only chilling and cold storage facilities are allowed to have a normal run. Besides, the non-
availability of labour has idled output. The scenario implies that only previously stockpiled
processed marine products could be shipped overseas. However, flagging demand among buyer
countries has dampened the spirit of exporters.
“It is going to be a very bad year for Indian seafood exporters. Prices are falling as exports have
dried up. Demand has contracted among importing countries. The Government of India’s efforts
to facilitate exports in this moment of crisis has hit the Covid-19 lockdown wall. Trucks and
manpower are not available to transport shipments. Exporters also need paperwork like
certification from MPEDA (Marine Products Exports Development Authority)”, said Tara
Ranjan Patnaik, founder & Chairman at Falcon Marine Exports Pvt Ltd. The company is the
country’s largest exporter of frozen and fresh shrimps with a turnover exceeding Rs 1,500 crore.
However, MPEDA has comments for sea food exports to China which has around 13 per cent
share in total is sea food export from India, one of fast growing market for India with 13 per cent
share.
MPEDA Chairman K S Srinivas said that in China all the buyers have stocked their inventory
well in advance to meet the peak demand due to Chinese New Year and new orders are placed
usually after the holiday period which lasts till second week of February. After the outbreak of
Virus, the exports are sluggish mainly due to lean period. "The Corona outbreak time is actually
a lean period as far exports of seafood are concerned. Once the Corona virus epidemic is
stabilized, we expect the forward movement to continue, especially as the seafood is considered
to be a healthy alternative," he said. It is too early to predict the price hike expecting due to lack
of availability of Chinese material in international market.
The Commerce Ministry data shows the exports of marine products have been almost flat at
$5.89 billion between April, 2019 to January, 2020, as against $5.84 during same period in the
previous year. India recorded a production of 0.618 million tonnes (MT) for L.vannamei variety
of shrimp during 2018-19. L.vannamei production from April to December 2019 was 0.610
million tonnes and estimated to cross last year's production figures.
Q.6.Comment on the role of United Nations Conference Trade and
Development (UNCTAD) to balance trade and environment protection
policies.

The United Nations observes that the global understanding of development has changed over
the years, and countries now have agreed that sustainable development-development that
promotes prosperity and economic opportunity, greater social well-being, and protection of the
environment offers the best path forward for improving the lives of people everywhere. Much of
the global environmental damage has been attributed to the increased scale of global economic
activity, where international trade constitutes a growing portion of global economic activity,
making it an increasingly important driver of environmental change. This is justified on the fact
that, at the most basic level, all economic activity is based on the environment. Natural resources
such as metals and minerals, soil, forests, and fisheries are basic inputs to production of any
goods, and also provide the energy needed to process them.
The Report of the United Nations on Environment and Development, Our Common Future,
asserts that economic growth always brings risk of environmental damage, as it puts increased
pressure on environmental resources. Thus, policy makers guided by the concept of sustainable
development should necessarily work to assure that growing economies remain firmly attached
to their ecological roots and that these roots are protected and nurtured so that they may support
growth over the long term. This is due to the fact that environmental protection is inherent in the
concept of sustainable development, as is a focus on the sources of environmental problems
rather than the symptoms. Trade is considered as one of the driving forces of economic
development for all countries, usually aimed at development and the eradication of poverty. On
the one hand, environmental law, both national and international, and environmental policies—
such as promotion of renewable energy, environmental taxation and conservation measures—
help define how countries will structure their economic activities. On the other hand, trade law
affects the way in which countries design their laws and policies in areas—such as subsidies,
technical regulations, investment policy and taxes— that are integral to environmental policy.
Recalling that some of the significant goals of sustainable development are eradication of
poverty and economic growth, and that it is now a recognised precondition for ensuring a long-
term perspective for the economy, these two concepts, trade and sustainable development, are
arguably inextricable. The Report of the World Commission on Environment and Development,
Our Common Future, rightly points out that previously, responsibility for environmental matters
had been placed in environmental ministries and institutions that often had little or no control
over destruction caused by agricultural, industrial, urban development, forestry, and
transportation policies and practices. As such, society failed to give the responsibility for
preventing environmental damage to the 'sectoral' ministries and agencies whose policies cause
it. Accordingly, environmental management practices focused largely upon after-the-fact repair
of damage: reforestation, reclaiming desert lands, rebuilding urban environments, restoring
natural habitats, and rehabilitating wild lands. To correct this, the World Commission on
Environment and Development, therefore, suggested that the ability to anticipate and prevent
environmental damage would require that the ecological dimensions of policy be considered at
the same time as the economic, trade, energy, agricultural, and other dimensions. Thus, long term
sustainable growth would require far-reaching changes to produce trade, capital, and technology
flows that are more equitable and better synchronized to environmental imperatives.
The recommendation by the United Nations Conference Trade and Development has since
seen a paradigm shift in the global approach to the relationship between trade and environment.
Indeed, this shift has been reflected in many trade and economic policies, which have
incorporated such issues as the concept of internalisation of environmental costs as an incentive
for the states and multinationals to be conscious of environmental matters in their business
transitions. The concept of internalisation of environmental costs implies that market prices
should reflect the environmental costs of the production and use of a product in terms of natural
resource utilisation, pollution, waste generation, consumption, disposal and other factors. This is
believed to be a focal point of environmental economics.