Informal sector: Sharp decline in economic recovery, wages, govt relief 'insignificant'

Counterview Desk 
In its comprehensive analysis of the informal sector economy, the Working Peoples’ Coalition (WPC) has said it is “in shreds”, as there has been a “sharp increase in poverty, indebtedness and hunger” among the workers employed in the sector.
Claiming that the various programmes of the government to alleviate the situation have failed because of policy paralysis, WPC said, it gets 15-20 cases of wage thefts, harassments, accidents and injuries every day at India Labourline -- a mediation and legal aid centre established as an alternate governance system.
“This explicitly shows the quantum of precarity that informal workers must face which directly affects their resilience and ability to recover from the pandemic and lockdown shocks”, it adds.

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A sharp increase in poverty, indebtedness and hunger

No extension has been announced for Garib Kalyan Yojana after 1 year as if there are no more COVID waves. The Hunger Watch study conducted in November and December 2021 in 14 states found that 62 % of the poor had lost income, 71% reported reduced nutritional qualities and 66% reported reduced food consumption. In a scenario where the poor and marginalized are over-represented among the vulnerable migrant workers in the country, this signals a severe impoverishment among this community and indicates the need for targeted nutritional support through the National Food Security Act, 2013.
The programmes such as the Public Distribution System (PDS) or specific relief schemes, crisis cash transfers, proved to be inadequate or excluded many informal workers because of the lack of recognition of their status as workers or because they are largely inter-state migrants. The majority of the workers had received assistance from civil society, non-governmental organisations either directly or through the assistance of the trade unions.
The inadequacy of relief is a repeating pattern across different kinds of measures. A telling empiric is that even after receiving the government cash transfers, a vast majority of households had to take further debt to meet their daily expenses (Sampat et al, 2022).
‘One Nation One Ration Card’, the flagship programme announced by the Union government to guarantee portability of PDS entitlements, especially targeted at ensuring food security for migrant workers who traverse the length and breadth of the country, has been marked by a lack of coherent strategy and patchy implementation. 

Coordination between source and destination states and meaningful incentivization of critical stakeholders such as fair price shop dealers has jeopardized the potential for effective implementation on the ground.

Fall in wages and rise in wage theft

Informal workers in India suffered a 22.6% fall in wages, even as formal sector employees had their salaries cut by 3.6% on an average, according to a report by the International Labour Organisation (ILO). 

Even before the pandemic, the growth of the informal sector was sluggish due to demonetisation and GST issues, however, the pandemic spelt disaster for the informal sector. World over the minimum wage revision has been rolled back. But now there is an urgent need to revise the minimum wages for economic recovery and purchasing power parity.
Despite sharp declines in the economic recovery as well as wage incomes and self-employed livelihoods, government relief was insignificant. A wide range of feasible policy proposals, such as the National Relief package proposed by WPC on 13th June 2021, could have been immediately implemented within the existing institutional framework. But the Union government has shown extreme parsimony.
The Working Peoples’ Coalition gets 15-20 cases every day at India Labourline (it is a mediation and legal aid centre established as an alternate governance system grounded on decades of on-field experiences of the workers' woes with no institutional framework or labour governance system to redress) of wage thefts, harassments, accidents and injuries.
Since its inception on 17th July 2020, India Labourline has registered wage theft cases amounting to 5.5 crores from 18 states. This explicitly shows the quantum of precarity that informal workers must face which directly affects their resilience and ability to recover from the pandemic and lockdown shocks.

Policy paralysis on labour protection

Four labour codes were passed in September 2020 without debate or discussion in Parliament, and without adequate consultation with worker organisations. These legislations represent a mix of welcome as well as problematic provisions that needed, especially after the structural vulnerability made evident by the pandemic, to be framed with workers and not just for them.
Yet even these Codes have not been implemented with no federal state government finalising rules/regulations or extending actual entitlements to workers mentioned in the Codes. At a crucial time for workers, labour governance architecture is in a state of suspension right now with stakeholders not clear as to what rules to institute and abide by.

There is no clarity on how e-Shram will work with existing databases on informal workers and how to connect labourers to welfare schemes

Many draft policy documents highlighted the work conditions and lack of justice systems for migrant workers including NITI Aayog's draft policy on migrant workers, but they are still waiting to see the light of the day. A few state governments such as Jharkhand, Chhattisgarh, Telangana have formulated welfare policies to provide support to migrant workers, but they still await any form of meaningful implementation on the ground.

Dismal performance on urban housing policy announced for migrant workers

Affordable Rental Housing Complex (ARHC) was announced on 20th July 2020 under the Pradhan Mantri Aawas Yojana Urban as a relief measure to the mass exodus of migrants from urban centres. A total of 83,534 in 13 states was the quantum of vacant housing of which 5,487 houses have been converted into ARHC. Close to 2 years into the implementation of the scheme, the performance is a dismal 6.55%.

Lack of workers' safety and security

On 3rd February 2021, a heavy iron mesh with other construction materials fell on workers at the under-construction building at Pune. It killed 5 workers, leaving five others severely injured. The workers, who were migrants from Bihar, were also not registered with the Maharashtra Building and Other Construction Workers Welfare Board or the Interstate Migrant Workers Act, 1979.
An independent team of experts was constituted immediately by WPC, to investigate and one of the shocking findings of the team was the inadequate or no provision for the safety and security arrangements for the workers on the site.

What next?

• Recognise migrant workers: Right now, there is no clarity on how E-Shram will work with existing databases on informal workers and how to connect labourers to welfare schemes. What is the promise of E-shram beyond recognition of informality? Can social protection schemes and their reach be improved via E-Shram? Therefore, the government needs to ensure proper recognition of migrant workers as a priority.
• Give relief to migrant workers: Even as the formal economy and GDP recover, there needs to be a specific stimulus to migrant and informal workers to compensate for lost income and savings, and address accrued debt, along the lines of the proposed National Relief Package.
• Protect migrant workers: Making occupational health and safety a fundamental right at work would reduce the toll of death, injury and illness for workers, businesses, families, and communities. It would save lives at work. The COVID pandemic has only reinforced the case for health and safety at work to be given a higher profile and a higher priority. The centennial ILO conference was held nearly three years ago even before the COVID-19 pandemic struck, and it was agreed that occupational health and safety should become a fundamental right at work. But it still hasn’t happened. OH&S should be made a fundamental right at work.
• Create employment for migrant workers: The country needs national policy commitment to preventing urban workers from falling into poverty, noted a September 2020 analysis. Urban employment programmes have been implemented by five state governments, but remain limited in scope, are not equivalent to large-scale job guarantee programmes like MNREGS, and are not gender-responsive, especially in the light of increased migration of women and children to the cities.
• Make policies for and with migrant workers: Labour policy architecture cannot be in uncertainty at a time when workers are in crisis. The SDG 8.8 targets to ‘Protect labour rights and promote safe and secure working environments of all workers, including migrant workers, particularly women migrants, and those in precarious employment. Similarly, SDG 10.7 targets to ‘Facilitate orderly, safe, regular and responsible migration and mobility of people, including through implementation of planned and well-managed migration policies.’ A comprehensive policy and legislation encapsulating SDGs 8.8 and 10.7 for migrant workers need to be developed.
• House migrant workers: There is an urgent need for housing for migrant and informal workers and multi-pronged approaches of slum upgradation, worksite housing, and redevelopment of sustainable and adequate rental housing, including secure temporary housing for migrant workers.