Lockdown to fight coronavirus is going to hit most Indian workers very hard3 min read . Updated: 23 Mar 2020, 11:20 AM IST
Most workers live on uncertain earnings, and emergency measures need to include compensation for them
With at least 250 million Indians going into lockdown from Monday morning, one question looms large - what will precariously placed workers do?
The share of those in India with precarious jobs is far higher than is commonly believed to be the case. According to the most recent labour statistics, 25 percent of rural households and 12 percent of urban households rely on casual labour as their main source of income. Casual labour was defined as a person who was engaged not in a fixed, but in a casual manner in another person's enterprise and, in return, was paid daily or periodically.
But this doesn’t mean that other jobs are stable. Over 40% of those in urban areas are now in “regular" or salaried jobs but these do not necessarily come with job security. Over 70 per cent of salaried employees in the non-agricultural sector had no written contracts, and over half were not eligible for paid leave. The share of workers not eligible for paid leave has grown steadily over the last 15 years, from a minority at 46% in 2004-05 to being the norm now. Nearly half of salaried workers in non-agricultural jobs are not entitled to any social security benefits including health care.
Self-employed work too is not the sort of entrepreneurial businesses that the term tends to conjure. Most of the self-employed in urban areas are solo workers who work 55-56 hours a week and make around ₹14,000 per month
Would the impact of the “janata curfew" on March 22 have been blunted by the fact that it was a Sunday? For the average Indian worker, Sunday is just another day. Most workers across different forms of employment work nearly seven days a week on average.
Nor is there much in the bank to rely on as a buffer. The median rural family had under ₹4 lakh in total assets, while the median urban family had under ₹6 lakh in total assets, including all their household possessions.
Shocks can easily push vulnerable people into poverty, and in the absence of education, physical and social capital, people from marginalised communities including Dalits and Adivasis, are particularly in danger of falling into poverty.
What then can the government do to mitigate the impact of lost wages for a workforce that largely counts on its day-to-day earnings? The International Labour Organisation (ILO) recommends extending social protection and supporting employment retention to protect against job losses and worker hardship during the pandemic.
But for those who do lose wages, the most widely suggested solution currently is an income transfer, something that is being discussed even in developed countries hard hit by COVID-19-imposed lockdowns. The most recent National Sample Survey on consumption expenditure (not released by the government) found that the average monthly per capita expenditure in urban areas was a little under ₹4,000. In the 2016-2017 Economic Survey, then Chief Economic Advisor (CEA) Arvind Subramanian authored a chapter outlining what a Universal Basic Income could look like. At ₹12,000 per month, it would wipe out poverty (based on older 2011-12) estimates, he suggested.
Yet, access to banking remains well short of universal, despite the Modi-era expansion. According to the World Bank’s Global Findex Database 2017 , while 80% of adults had a bank account in 2017, just 43% of them had made a withdrawal in the past year.
In-kind transfers would be another way to go, but reaching the poorest remains challenging. The Economic Survey noted that “[a]n estimate of the exclusion error from 2011-12 suggests that
40 percent of the bottom 40 percent of the population are excluded from the [Public Distribution System]. The corresponding figure for 2011-12 for [the Mahatma Gandhi National Rural Employment Guarantee Scheme] was 65 percent". States that targeted less and universalised more had lower leakages and better success at reaching the poor.
India does not have to look far for a combination of targeted and universal, cash and kind assistance. Kerala and Uttar Pradesh have announced one month’s free rations, permission for advance drawing of welfare pensions and ₹1,000 in cash for those who are poor but do not receive pensions.
As a fifth of the country wakes up to life under lockdown, all states will need to draw up similar plans.
Rukmini S. is a Chennai-based journalist.