Explained: Which factories should reopen after India’s coronavirus lockdown?

Second, while the government’s focus so far has been on sorting out distributional issues, especially with regard to the movement of essential goods, it would now have to also look at the production end of the supply chain. Given that stocks with company depots, distributors and retailers are likely to eventually run out, resumption of manufacturing activity becomes vital.

The question arises: What kind of manufacturing can be allowed that will minimise the risk of uncontrolled spread of infection?

Two lakh factories

One useful source of information could be the National Sample Survey Office’s Annual Survey of Industries (ASI), which covers all organised manufacturing establishments with power connection that employ at least 10 workers, and those engaging 20 and more without the aid of power. Since these are registered units under the Factories Act, 1948 – unlike leather belt and garment makers in Mumbai’s Dharavi or Delhi’s Gandhi Nagar – they can technically be monitored and, hence, subjected to social distancing rules.

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According to the last published ASI numbers for 2017-18, there were 1,95,584 operational factories across India. Together, they engaged 1.56 crore persons, and produced a total output value of Rs 80.72 lakh crore.

There are some interesting trends:

Trends: output, outbreak

* The state with the largest share in factory output, Gujarat, is ranked No. 11 in the number of confirmed COVID-19 cases. Delhi, which has reported the third highest cases, isn’t even among the country’s top 20 manufacturing states. Telangana and Kerala rank No. 4 and No. 5 in the number of corona cases, but No. 13 and No. 15 respectively in registered manufacturing output (see charts below).

* A district-wise analysis yields more revealing trends. Going by the Ministry of Health & Family Welfare’s latest data, only 146 out of India’s 700-plus districts had five or more positive cases of COVID-19. These 146 districts accounted for 3,266, or 80.3%, of the total 4,067 cases for which district-level information is available at present.

* Many industrial centres — Tiruppur and Sriperumbudur-Oragadam in Tamil Nadu; Kutch, Jamnagar, Bharuch and Mehsana in Gujarat; Raigad and Aurangabad in Maharashtra; Bhilai, Raigarh and Korba in Chhattisgarh; Rudrapur in Uttarakhand; Baddi in Himachal Pradesh; or the centrally-administered Silvassa and Daman – have recorded very few cases.

‘Essential’, or not

The ASI figures also show that 86.15% of the registered manufacturing sector’s output of Rs 80.72 lakh crore and 72.41% of its 1.56 crore employees in 2017-18 came from the corporate sector — both non-government and government companies — and only the balance were from individual proprietorship and partnership firms.

The former set of units would, again, be more amenable to regulation and enforcement of social distancing. It would be even more so for units in relatively secluded special economic zones such as Kandla, Mundra and Sri City.

If social distancing can be rigorously implemented in organised manufacturing, there would be no need to insist that such activity should be restricted only to the production of “essential goods”. A narrow definition of such goods may include food and pharma products, but not textiles and wearing apparel. This, despite the latter category employing 28.68 lakh persons as per the 2017-18 ASI data, more than the 17.72 lakh employed in food products and 7.40 lakh in pharma units.

Other major employers, who may also not fully qualify as supplying so-called essential goods, include basic metals (10.33 lakh persons), other non-metallic mineral products (10.91 lakh), motor vehicles and trailers (10.18 lakh), machinery (8.49 lakh), chemicals (8.28 lakh), plastic and rubber products (7.13 lakh), fabricated metal products (6.92 lakh) and electric equipment (5.98 lakh).

The challenge ahead

Currently, almost every industry — barring coal mines, oil refineries, fertilisers, pharma, and those requiring continuous process operations such as steel blast furnaces or aluminium smelters — is shut. Resumption isn’t going to be easy even if the lockdown restrictions are lifted. The biggest constraint would be labour and trucks. Manufacturers need labourers not only for production, but also for loading, dispatching and unloading operations. Goods can be moved through railways, but the journey from rake points to local area is possible only through trucks.

A signalling of intention now to allow relatively big manufacturing units to reopen after April 14, with strict enforcement of social distancing conditions, would give some lead time for re-mobilisation of labour and logistical resources. Factories may then be able to start producing — even if in a small way.

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