The International Labour Organisation (ILO) made public a report on 7 April in which it has said that 40 crore people in India will be pushed ‘deeper into poverty’. That’s around 30 percent of the population. Close to 90 percent of workers in India are employed in the informal sector.
The decline in activity caused by various forms of lockdowns across sectors like wholesale and retail trade, real estate and manufacturing could displace worldwide 125 crore workers, who were already disadvantaged by lack of social security, the report also said.
Oxfam, the global not-for-profit that works on poverty, released a report on 9 April, which said that the COVID-19 pandemic could push a further half a billion people into poverty by the slowdown or cessation of economic activity, which would mean that over half of the world’s population could be living in poverty in the aftermath of the pandemic. The fight against global poverty could be set back by up to 30 years in regions such as sub-Saharan Africa, North Africa and West Asia, it said while appealing to world leaders to agree on an ‘Economic Rescue Package for All’.
The Guardian reported, also on 9 April, that multinational food companies, farmers’ organisations, the UN Foundation, academics and civil society groups, have written to world leaders calling on them to keep borders open to trade in order to help the most vulnerable of people and to invest in environmentally sustainable food production. In the absence of action, food supplies could be ‘massively disrupted’ and the number of people chronically hungry could double globally.
A group of Nobel-winning economists and 100 former heads of government have urged immediate action but concerted policy mobilisation is not yet evident. The Food and Agricultural Organisation (FAO) has warned that despite bumper harvests, trade restrictions could create shortages.
These dire prognostications are acutely relevant for India. While the warnings about the theoretical availability of food perhaps don’t apply so forcefully to India, which is macro-situationally self-sufficient in food supplies, there is the very real problem of making sure that the large numbers of people without livelihoods and incomes get food.
On 26 March, the second day of the lockout in India, Union finance minister Nirmala Sitharaman announced a financial package to deal with the situation arising from the response to the pandemic, adding up to Rs 1.7 lakh crore. The features of interest to us, in the present context, were that about 80 crore people would get free cereals and cooking gas, apart from direct cash transfers for three months.
The Pradhan Mantri Garib Kalyan Yojana included higher wages under the Mahatma Gandhi National Rural Employment Act (MGNREGA), an exgratia payment of Rs 1,000 to nearly 3 crore poor senior citizens, widows and disabled as well as insurance coverage of as much as Rs 50 lakh each for about 20 lakh healthcare workers battling the disease.
This was the first response to meet urgent, immediate needs and further packages will surely follow to meet the needs of the poor as the Union and state governments factor in new problems as they crop up, and numbers are crunched, situations analysed, imperatives underlined and policy reformulated.
As almost everyone realises, the situation is fluid. It isn’t yet clear, for instance, what direction we will proceed in after the first lockdown gives over. The likelihood that it will continue with minor adjustments will mean greater attention will have to be paid for those already in a vulnerable position. Vulnerabilities have already manifested themselves and will now need to be addressed at speed.
To begin with, the initial package itself has problems. Take the increase in the minimum wage by Rs 20 under the MGNREGA. First, many states already pay more than the increased amount of Rs 202. More important, in the current lockdown situation there is the very real apprehension that the employment scheme will not generate much employment under the lockdown anyway.
The current direct cash transfer of Rs 500 each in three monthly instalments into the Jan Dhan accounts of about 20 crore women, with the first already credited, is a start but is hardly enough. More direct cash transfers will be required to provide necessities to those who cannot afford them.
Up until now, as both reports mentioned, have pointed out, the lockdown in India has exposed primarily workers in the unorganised or informal sector, who constitute almost 90 percent of the workforce, including, or especially, migrant workers. It can be presumed that workers in micro, small and medium enterprises that are within the formal sector are similarly placed.
After the imposition of the lockdown, an army of migrant workers streamed out of their work locations towards their homes, in some cases hundreds, in some thousands, of kilometres away. Some couldn’t leave because of the lockout; some were stopped on the way and housed in shelters or camps; some made it home. This migration has been described as the biggest movement of people since the Partition. Whether or not that is true, it is clear that all of them are faced with indigence, hunger or starvation, if not now, then imminently.
Some assumptions can be made. First, those who managed to reach home, and were the primary earners for their families, have a roof over their head, but no means to procure necessities. They and their families will need support in cash, or in a mix of cash and supplies. Second, those who couldn’t leave in the first place will need more support for themselves and their families, because they have the additional burden of paying for accommodation. Third, those who are trapped in transit will need cash to send home to possibly hungry families, despite the Chief Justice of India’s insouciance about their predicament.
Despite the lockdown, state governments or the Union government should make special provisions to ensure that unemployed workers return home, either to be rid of the burden of paying extra for a roof, or to escape shelters and camps where an outbreak of COVID-19 could spread calamitously.
At the end of March, Niti Aayog vice-chairman Rajiv Kumar had said that the government could look at suggestions for direct cash transfers to unemployed workers, including migrants. Nothing has transpired in this connection as yet. It’s time, with an extension of the lockdown looming, to hasten such payments. There are resource constraints, of course, but the government could consider the spirit of Nobel Prize-winning economist Abhijit Banerjee’s opinion, offered on 8 April, that money should be printed and cash transfers made, without bothering at the moment about macroeconomic stability being threatened by fiscal slippages and inflation.
With, in the ILO’s estimation, about 30 percent of the population exposed to the risk of sinking deeper into poverty, immediate action to prevent hunger and starvation seems to be ineluctable. Apart from getting food and/or cash, into the hands of the indigent and unemployed, food supply chains must be secured and procurement processes made more robust in the interests of both producers and consumers.
Recognising problems in these areas, the Centre issued a number of orders on 9 April to enhance and streamline procurement and supply chains from farms to markets, after consultations with states. To achieve this, coordination between states is essential in respect of making and enforcing lockdown rules. There have been reports of trucks being piled up on highways and at interstate borders.
Finally, though it might sound clichéd, the massive problems faced by the country (and the world, of course) presents an opportunity to invest massively in the social sector – health, education, benefits and other social infrastructure – now, and when the time comes to kickstart the economy.
Updated Date: Apr 10, 2020 17:28:36 IST