New Delhi: As the second wave of the COVID-19 pandemic is ravaging India, a report prepared by the Center for Sustainable Employment at Azim Premji University (APU) pointed out that jobs and incomes have not regained their pre-pandemic levels, even belatedly. 2020 and the latest wave of cases would only add to the devastation and distress.
The report, titled “State of Labor in India 2021 – One Year of Covid-19,†was released on Wednesday, May 5. He highlights how women lost more jobs than men during last year’s pandemic, how nearly half of formal workers moved. in informal work and how poorer households suffered much higher income losses during the foreclosure period.
The damage to the economy from the pandemic has been enormous and the poor have been hit the hardest. The report found that 230 million more people were below the poverty line of the national minimum wage.
He said: “It happened because of income shocks.” To counter the loss of income, the report also noted how “the poorest households took out the largest loans relative to their income” and warned that as many of these loans were taken from private lenders in high interest rates, they put borrowers’ financial situation in jeopardy.
Representative image. A man rides a bicycle during a lockdown to limit the spread of coronavirus disease (COVID-19) in Mumbai, India, April 23, 2021. Photo: Reuters / Niharika Kulkarni.
Learn from the 2020 experience
The report highlighted the “unprecedented hardship for Indian households” encountered during the pandemic. He also looked at the “severe supply-demand shock” that resulted from the economic downturn, which existed even before the pandemic, and how this, in turn, led to job losses. and income, increased informality and food insecurity, and increased poverty and inequality.
With India in the midst of the second wave of Covid, according to the report, it is “all the more imperative to learn from the experience of 2020. Who has been affected and how?” What worked and what didn’t? Has the social safety net worked for the most vulnerable households? What should be the way forward? “
Giving a brief introduction to the report in an online session, APU’s Arjun Jayadev said that despite what politicians are saying, the endgame regarding Covid is not appearing anywhere.
“We have seen a lot of noise around us, but there is a lack of clarity on the impact of the lockdown. This report will help us guide us a little for the future. It asks and answers a large number of questions and provides clear and insightful policy recommendations. “
Contribution of the pre-COVID economic slowdown
The report was presented by Amit Basole of APU. He explained how the report deals with the “pre-Covid contextâ€. He notes that the country was experiencing the “longest economic downturn since 1991” with poor job creation, uneven development and a largely informal economy before the pandemic struck. These factors “expose us to very high structural vulnerabilities” and “this is why the impact has been so enormous on livelihoods – especially in the areas of petty trade, construction and transport”.
Additionally, Basole said, with little or no social protection available through employers and the safety net mainly rooted in the home, the poorest were hit hardest. These included the self-employed and casual workers, who account for 45% of total urban employment.
The report found that “employment and income have not returned to their pre-pandemic levels, even at the end of 2020”. He said the “labor force participation rate” and “average monthly income per capita” remained below pre-Covid levels.
“The second wave is going to make matters worse,†Basole said, adding that in October-November 2020, nearly 20% of informal workers were still out of work.
The report also noted that there was a strong regional element to the crisis. Basole said Haryana, Delhi, Uttar Pradesh, Maharashtra, Kerala and Tamil Nadu had suffered more than proportionate job losses.
High incidence of unemployment among women
The report also found that “women were more likely to lose their jobs than men”. She found that there was no resumption of employment for 7% of men while for women, the rate was 46.6%.
Furthermore, he found that while “men (were) more likely to move into informal employment, women (were) more likely to leave the labor market. This was because men had more fallback options (mainly because they had more flexibility to move).
In addition, it was pointed out during the question-and-answer series later that many women were stuck at home due to increased household needs during the pandemic.
As APU’s Rosa Abraham noted, “the burden of domestic work and engagement at home has also increased for womenâ€. In addition, she said, regardless of the type of education they had, women were more affected in terms of employment by the pandemic.
Underemployed and underpaid
The report states that nearly half of formal workers entered informal work during the pandemic. Among permanent employees, she said, 47.6% remained in the category, 9.8% went to daily or casual salaried work, 34.1% became self-employed and 8.5% became temporarily employed.
“So people came back to work, but they weren’t doing the kind of work they used to do,†Basole said.
The study also found that there was a loss of monthly earnings for all types of workers. He said the drop was 13% for casual workers, 18% for the self-employed, 17% for those on temporary wages, 5% for permanent employees and 17% overall. In addition, the number of people who won nothing increased between February 2020 and the end of the year.
Migrants wait to board trains to their places of origin during the COVID-induced lockdown to curb the recent spike in coronavirus cases, at NDLS station in New Delhi on Tuesday, April 20, 2021. Photo: PTI
Borrowing and the debt trap
During the lockdown period, according to the report, nearly 230 million more people fell below the national minimum wage poverty line. He said it happened because of income shocks. To survive during the pandemic, the poorest households took out the largest loans relative to their income.
Thus, the poorest 25% of households borrowed 3.8 times their median income, against 1.4 times for the richest 25%. The study warned that this could lead to a possible debt trap for them.
Six months later, he also noted that food intake was still at the lock-in level for 20% of vulnerable households.
Inadequate political response
The study examined the reach of Pradhan Mantri Garib Kalyan Yojana via the Public Distribution System (PDS) in Karnataka and Rajasthan to assess the political response to the crisis. He noted that about 30% of PDS priority ration card holders did not receive the additional rations promised in those two states. There were also exclusions in Jan Dhan’s cash transfers.
The report also looked at innovations and increases at the state level, but said there was very little data on their performance.
He added that cash transfers were low and represented 12% of GDP per capita. Likewise, in the implementation of Mahatma Gandhi’s National Rural Employment Guarantee Law scheme, he indicated that demand was not met but the program budget had returned to pre-government levels. pandemic.
Free rations and cash transfers
The report also contained policy recommendations to improve the situation in the short term.
He demanded that there be an extension of free rations beyond June 2021; there should be a cash transfer of 5,000 rupees for three months to vulnerable households; there should be an extension of the NREGA fee to 150 days and an extension of the budget to Rs 1.75 lakh crore; and a pilot urban employment program be launched in the most affected districts while focusing on women workers.
In addition, the study suggested an increase in the central contribution to the old age pension to at least Rs 500.
Recognizing that this was a “once-in-a-century crisis” in which severe pain is inflicted on the poor, she stressed the “need to ensure that the pain is distributed according to the ability to bear it. . So far, the pain endured by those who are the least able â€.
Abdication of responsibility by the Center
During the roundtable discussion following the publication of the report, Yamini Aiyar, director of the Center for Policy Research, said there was a need for the government to also publish its own surveys and analyzes on relief, budget support and long-term planning. he provided and has in mind.
“One of the challenges is what level of government should be doing what kind of work. There was no maturity in the delegation of powers and that hurt us. The central government invoked the Disaster Management Act and made decisions through committees on issues in which states had greater experience and better infrastructure. All the states needed was appropriate fiscal and monetary support. “
And now, as the country goes through a second wave and a major health crisis in the second wave, Aiyar said, “The Center has abdicated responsibility by saying that health is a matter of state.”
She added that Kerala has shown that a lot can be done by strengthening local self-government and building their capacities. “Transparency of information, decentralization and empowerment of local government can help counter this wave, but all of these are missing for now.”
Vaccination program
The visiting professor of economics at Ranchi University and social activist Jean Dreze added in the same vein that in the case of the ongoing vaccination program as well, “the abdication of the central government this time is worse”.
“The Center threw the States under a bus. It first opened up vaccination to people between the ages of 18 and 45, and then it allowed manufacturers and hospitals to charge their own rates. Companies would therefore prefer to sell to the private sector. It would be more difficult for the poorest states to pay. They also have to deal with food security and other issues, â€he said.
Psychological impact
Farzana Afridi, professor of economics at the Indian Institute of Statistics in Delhi, said that “relatively speaking, the effects of the lockdown and the pandemic have been felt more in urban areas than in rural areas.”
She said the data also revealed that young people were more affected by job loss and therefore demanded that an urban employment guarantee program and an urban infrastructure promotion program be put in place to address the problem.
Afridi said her work with the poorest households also revealed that, when it comes to their psychological well-being, women in those households were worse off in terms of the impact of the pandemic on them. “These job losses add to their woes,” she added.
