Skip to main content

As poverty, unemployment rise, India’s 'poor' fiscal response to Covid at 1.5 of GDP

By Kingshuk Sarkar* 

India’s labour market is characterized by incidences of very high level of informalization and precariousness. A study has revealed that the pandemic-induced lockdown led to further deterioration in quality of works and earnings.
The impact of last year’s nation-wide pandemic induced lockdown on the labour market, particularly on the informal sector workers have been very severe. The study by the researchers of Azim Premji University reveals that 100 million lost jobs during the nationwide April-May 2020 lockdown.
Most of them were back at work by June 2020, but even by the end of 2020, about 15 million workers did not find work. Incomes also fell. For an average household of four members, the monthly per capita income in Oct 2020 (I4,979) was still below its level in Jan 2020 (I5,989) .
As a result of the employment and income losses, the labour share of GDP fell by over 5 percentage points from 32.5% in the second quarter of 2019-20 to 27% in the second quarter of 2020-21. Of the decline in aggregate income, 90% was because of reduction in earnings and 10% was because of loss of employment. This implies that even though most workers returned to work but they suffered from loss in earnings.
The study further found that job losses were more severe in States where infection rates were high. Maharashtra, Kerala, Tamil Nadu, Uttar Pradesh, and Delhi, contributed disproportionately to job losses. Lockdown caused mobility restrictions which led to decreased economic activity. A 10% decline in mobility was associated with a 7.5% decline in income. Such correlation is important in estimating the impact of future lockdowns.
From gender perspective, job losses were more severe for women workers. According to this study, during the lockdown and in the months after, 61% of working men remained employed and 7% lost employment and did not return to work. For women, only 19% remained employed and 47% suffered a permanent job loss during the lockdown. This will further aggravate the trend of declining female labour force participation rate witnessed during the last two decades.
In recent times, India dropped by 28 positions to 140 out of 156 countries in the World Economic Forum’s (WEF) Global Gender Gap report. The report identifies the decrease in women’s participation in the labour force from 24.8 percent to 22. 3 percent.
Men, who lost wage employment, because of lockdown shifted to some form of self-employment for survival. However, sizable number of women permanently withdrew from the labour market as they had domestic responsibilities too. Women spent more hours at domestic works as the entire family got confined to home during lockdown.
According to the Azim Premji University study conducted in Karnataka and Rajasthan, the proportion of working women who spent more than 2 hours a day cooking went up from 20 per cent to almost 62 per cent in Karnataka and from 12 to 58 per cent in Rajasthan. Such findings confirm the fact burden of domestic work increased for women workers.
Quality of jobs also suffered after lockdown was withdrawn in a phased manner. Most workers returned to work as they had no options but they suffered a deterioration in terms of employment and conditions of service. Work became more precarious and informal. Proportion of non-standard employment increased.
Nearly half of formal salaried workers moved into informal work either as self-employed (30%), casual wage (10%) or informal salaried (9%) workers between late 2019 and late 2020. As a consequence of greater informalization of work, monthly earnings of workers fell on an average by 17% during the pandemic. Self-employed and informal salaried workers were the worst sufferers.
Overall because of wage cut and loss of earnings and deterioration in service conditions, 230 million workers experienced a wage cut that fell below the recommended national wage of Rs 375 per day. Anoop Satpathy Committee recommended such a wage taking into consideration all the relevant details. However, government is still to act on this.
Code on Wages 2019 sets up two advisory committees at the Central and State levels. This Code also proposed a zonal floor wage to be notified by the central government. No state minimum wage can be fixed below the zonal floor wage. However, floor wage is differentiated from minimum wage is not clear. Fixation of minimum wages still remains with the respective advisory boards.
Post-pandemic work looks severely disjointed and pathetically precarious. We need to act fast and act decisively
Study results show that because of the fall in wages there is an increase in the poverty rate by 15 percentage points in rural and nearly 20 percentage points in urban areas. Had the pandemic not occurred, poverty would have declined by 5 percentage points in rural areas and 1.5 percentage points in urban areas between 2019 and 2020 and 50 million would have been lifted above this line.
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) provided some relief in rural areas along with food grains supplied through PDS. As per the official database, till November 2020, over 252 crore person-days of work was generated, an increase of 43 per cent compared to previous year.
Cash transfers, PM-KISAN payments and pension payments were some of the other support measures announced in 2020 as part of the Pradhan Mantri Garib Kalyan Yojana (PMGKY) and the Atmanirbhar Bharat packages to combat the effects of the pandemic on vulnerable households. Still, most of the workers suffered.
Circular migrants have suffered the most during Covid-19 induced lockdown. Azim Premji University Study reveals that 81% migrants lost employment in the lockdown compared to 64% non-migrants. 31% reported not being able to access rations compared to 15% non-migrants.
Presently the country is passing through the severe second wave and its impacts are still unfolding. Repercussions on the world of work this time around can be much more severe as economy is already in dire straits with depleted savings, mounting debt, and reduced fall back options.
States, which are in the forefront of the pandemic onslaught, are severely constrained in their finances. It is high time that Central government undertake additional spending to ease things. Till now, India’s fiscal response to Covid-19 crisis amounting to around 1.5-1.7% of GDP, has been very moderate.
Given the outcome of last year’s impact, as Azim Premji University Study reveals, central government should come up with much heightened fiscal response this time around. Post-pandemic work looks severely disjointed and pathetically precarious. We need to act fast and act decisively.
---
*Independent researcher, works as a labour administrator with the Government of West Bengal, earlier served as faculty of the V V Giri National Labour Institute, Noida, and NIRD, Hyderabad

Comments

Unknown said…
An in-depth analysis. Very articulate writing.
ziA said…
👍. Hope by next u will take us to implications of Pandemic working pon Primary, Secondary and Tertiary

TRENDING

North Gujarat gram panchayat bars villagers from dealing with Muslim hawkers, traders

By Our Representative  A gram panchayat in North Gujarat has barred its residents not to buy anything from Muslim traders and hawkers. An order of the Waghasan group gram panchayat of Tharad taluka of Banaskantha district dated June 30 states that the decision has been taken in the wake of beheading of a Hindu tailor after he posted a derogatory writeup on Prophet Mohammad in Udaipur. The gram panchayat resolution says, anyone seen buying or selling any commodity from a Muslim hawker or trader would be fined Rs 5,100. Bringing this to light, Mujahid Nafees, convener, Minority Coordination Committee, in a letter to Gujarat chief minister Bhupendra Patel, says, the state government should take legal action against the panchayat chief who has signed the “unjust” order. The letter says, the act of the sarpanch and other signatories is a violation of rule of law of the state and threat to peace, pointing out, the move is in violation of Article 15 of the Constitution, which says that none

Unlike Soviet Union, Russia is no friend to India: Ukrainian scholar tells 'Indian friends'

Counterview Desk In an open letter to "dear Indian friends", Anastasia Piliavsky, born in Odessa, Ukraine, studied at Boston and Oxford Universities (on a Rhodes Scholarship), and now teaches at King’s College, London, has said that she faces "deep moral dilemma", personally and professionally, over the "astonishingly unified Indian response to the war in Ukraine." Based on her interaction with a "number of thoughtful and caring Indian friends", in this letter, she says, she is "reeling at the ubiquitous silence at, justifications of or outright support for Putin’s terror, which now prevails in India, at the ubiquitous #IStandWithPutin and #istandwithrussia hashtags." She insists, India must understand, "Unlike the Soviet Union, Russia is no friend to India. Soviet leaders, beginning with (the Ukrainian) Nikita Khrushchev – who declared hindi rusi bhai bhai – built up deep political and cultural exchange with India." Text : I

Technocratic globalism, tyranny? Health Ministry warned: bill to 'enslave' Indians

Sandeep Pandey, Tushar Gandhi By Rosamma Thomas*  Union of Concerned Citizens, a group comprising Magsaysay Award winner Prof Sandeep Pandey, human rights activist Tushar Gandhi, former judge of the Bombay High Court BG Kolse Patil, pediatrician Dr Jacob Puliyel and several renowned Indian citizens have written to the Union Health Minister cautioning him against tabling the draft Public Health Bill in the Monsoon Session of Parliament. “The Public Health (Prevention, Control And Management Of Epidemics, Bio-Terrorism And Disasters) Bill, 2017 and a Prospective Bill of 2022 as discussed in news articles, is straightforwardly violative of Fundamental Rights of the citizens of India and therefore, Ultra Vires of the Indian Constitution. It contravenes several International Treaties and Conventions including the Nuremberg Treaty of 1947 which was enacted to ensure that no country would repeat such inhuman medical atrocities on fellow human beings”, the 12-page letter reads. “Strangely, t

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Chennai residents 'suffering': Faulty design, implementation of storm water project

By NS Venkataraman*  The Greater Chennai Corporation is now implementing storm water drainage project in 559 roads, covering a distance of 1033 kilometres, which cost around Rs 4,070 crore. For this massive project, which is targeted to be completed between April and September this year, huge loan has been availed from World Bank, Asian Development Bank and others. Several technocrats have pointed out that the project has been designed with outdated technology and quality of the implementation is so poor that the residents have been put to great hardships. As part of the project, digging of the road has been done to around 5 to 6 feet deep and width of around 4 to 5 feet. The drains are being constructed using steel reinforced cement concrete with two walls on either side with provisions for manhole, chute etc. This has been done in front of several houses leaving little space between the gate of the house and that of the drainage structure. As the work has been going on for mor

'Drop all falsed charges': 150 citizens demand early release of AltNews co-founder

Counterview Desk  About 150 concerned citizens have demanded the release of Mohammed Zubair, co-founder of the fact-checkng newsportal AltNews, arrested over a 2018 tweet which allegedly hurt religious sentiments, even as booking for criminal conspiracy and having received foreign funds in violation of the Foreign Contribution Regulation Act (FCRA). Denied bail last weekend and sent to 14-day judicial custody, the concerned citizens, in a statement, regretted that while the Delhi High Court issued notice to the Delhi police on a petition filed on behalf of Zubair challenging the legality and propriety of his police remand and the seizure of his electronic devices, the “frivolous case” continues. Excerpts: The illegal arrest of Mr. Mohammed Zubair happened on June 27, 2022, by the Delhi Police for allegedly hurting religious sentiments and promoting enmity over a tweet from 2018. The IPC Sections included 153(a) (Promoting enmity between different groups on grounds of religion, race,

Prime Minister's 'affordable' housing policy fails to help Gujarat slum dwellers: Study

By Rajiv Shah  A new study on the implementation of one of the major policy initiatives for the urban poor by the Narendra Modi government after it came to power, Pradhan Mantri Awas Yojana (PMAY), has said that in Gujarat, which happens to be the Prime Minister’s home state, has quoted state officials as “confirming” that no progress towards tenure regularization, a key requirement for providing housing to the state’s slum dwellers. Stating that this particularly true of smaller town, the study, carried out by the non-profit Homes in the City (HIC), which is based in Bhuj, district headquarter of Kutch that saw a devastating earthquake in 2001, says, the failure to provide affordable housing is there despite the fact that there has been “significant demand” in all the 83 out of 153 Gujarat municipalities studied by experts involved in the study. According to the study, out f a total of 1.41 lakh demands for housing under the Beneficiary Led Construction (BLC) category, 94,232 (66.7%)

Electricity Bill: Centre's reform measures contain 'carrot and stick package' for states

Counterview Desk  The Peoples’ Commission on Public Sector and Public Services (PCPSPS), claiming to be a network of eminent academics, jurists, erstwhile administrators, trade unionists and social activists, seeking consultations with stakeholders with those who are against the government’s decision to monetise, disinvest and privatise public assets/enterprises, has said that the proposed Electricity (Amendment) Bill-2022 will have far-reaching impacts on the finances of states. Insisting that the proposed Bill would lead to “assault on India’s federal structure”, in a statement, it says, it would weaken the finances of states’ power distribution companies, have adverse impact on utility employees, cripple the states' finances, impose a heavy cost burden on the smaller subsidized consumers (especially farmers), and benefit only corporate business houses. “States cannot afford to ignore the far-reaching implications of the Bill on their economy, finances, agricultural and industria

'Highly abnormal': AltNews journo's arrest suggests 'deterioration in media freedom'

By Bharat Dogra*  Leading media organizations have come out in strong support of recently arrested journalist Mohammed Zubair. These organizations include, among others, the Editors Guild of India, the Press Club of India, the Delhi Union of Journalists and DIGIPUB, a platform for several important digital media organizations. All these organizations have condemned the recent arrest of the noted journalist and demanded his immediate release. While leading human rights organizations and political parties have also made somewhat similar statements, the strong support of media organizations is particularly important as the effort of the authorities has been to try to present the arrested journalist as someone who has been indulging in irresponsible journalism.  In such a situation the support of those media organizations who are familiar with his work and who are most capable of judging the quality of his work is very important. In this context it is important that some media organization

Majoritarian silence helping Hindutva forces 'handover' national resources to corporates

By Bhabani Shankar Nayak*  The majority of Indian citizens are witnessing the persecution and everyday violence against their fellow citizens who are Muslims and religious minorities. The growing assaults on reason, science, secularism, Indian democracy and constitution are going to be landmarks in Indian history of diminishing democracy and citizenship rights. It is clear that Hindutva ideology is directly promoting sectarian politics of hate which is dangerous for the unity and integrity of India, peace and prosperity of Indians. The majoritarian silence helps in empowering Hindutva and their electoral dividends. From witnessing the persecution in the sidelines to the active participation and cheering loud or silence accelerates violence against our neighbours and our fellow citizens. How and why do majority of Indians stay silent and contribute to the persecution of their fellow citizens who are Muslims and religious minorities? The question baffles me as an Indian because I have gr