Saving MSMEs A Priority Now, Not Salaried Middle Class: NITI Aayog Vice Chairman

Asked how India can get back to work when its workers are leaving the urban centres, Rajiv Kumar said the matter needs to be seen in perspective.

The government would also ensure that people have more money in hand, Rajiv Kumar said

New Delhi:

The ongoing exodus of migrants will not have a major effect on the functioning of industry in states when lockdown ends, since only a fraction of the migrants are going back, NITI Aayog vice-chairman Rajiv Kumar told NDTV on Wednesday. He also said for the government, saving the MSME (Micro, Small and Medium Enterprises) is a priority at this point compared to providing relief to the tax-paying salaried middle class.

As the country is set to enter the fourth phase of the lockdown in which some more relaxations look likely, the exodus of migrant labourers has caused a headache for states. At their meeting with Prime Minister Narendra Modi on Monday, several Chief Ministers have flagged the issue.

Last week, Karnataka government's move last week to scrap the trains for migrant labourers, asking them to keep the construction sector buzzing, had drawn widespread criticism.  

Asked how India can get back to work when its workers are leaving the urban centres, Mr Kumar said the matter needs to be seen in perspective.

According to leading experts in the field, he said, there are around 72 million migrants, of whom 35 to 38 million are in the workforce.

"If you take all estimates, I think not more than 5 or 6 million have moved back. The rest are in situ and as the lockdown is lifted and economic activities start, they can go back to where they were working".

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Pointing to the numbers, he said, "If you had 38 migrant million workers, of whom 5 or 6 million went back, the rest are available for being deployed at the production centres once economic activity starts".

Regarding the first tranche of the Rs 20 lakh crore Central package announced by Union finance minister Nirmala Sitharaman on Wednesday, he said the government "would not let the MSMEs  go under… we will do whatever it takes".

The government, he said, would also ensure that people have more money in hand.

Asked about the relief for salaried taxpayers who so far have received no benefits, he said, "I'm clear in my mind that saving the informal sector, which is led by the MSMEs, is a much higher priority than giving succor to the tax paying middle class which had a reduction in their tax liabilities earlier".

Ms Sitharaman has announced relief for middle classes on Wednesday – offering a 25 per cent reduction in TDS (Tax Deduction at Source) for non-salaried specified payments and TCS (Tax Collection at Source) for specified receipts.