Introduction
We are now living through the most uncertain moment of our times. Many countries have been in lockdown since early March 2020. Even Japan, once a beacon of hope for controlling COVID-19, is now moving toward total isolation. Many political leaders realize that physical distancing might be the norm for at least several months. They wonder how—or if—they can maintain indefinite lockdowns without compromising the livelihoods of their people.
Covid situation and its woes
As the pandemic continues its exponential course in India, people wonder what will become of their jobs when the lockdowns end. Businesses struggling to pay their employees and cover operational costs wonder if they will have clients or customers when they reopen.
Banks and investors realize that many companies, especially small and midsize ones, will default and are trying to protect both financial stability and public savings.
This daunting scenario poses several basic questions. How can we save both lives and livelihoods? Which decisions are best managed by governments? How can they evaluate the risks that experts predict from a prolonged lockdown, such as starvation, domestic violence, and chronic depression—as well as protect jobs, income security, food supplies, and the general welfare of the most vulnerable people among us? How and to what extent should they try to save banks, prevent fiscal ruin, and safeguard future generations?
Pre covid
Before delving into the lurching livelihood situation in India, it is important to highlight some major trends in the prevailing national-level employment. In 2018, India’s population was estimated at 136.6 crore consisting of 26% children (0-14 years) and 74% adults (15+ years). The adult population (101 crore) includes 66% working age people (15-59 years) and 8% senior citizens (60+ years). As per the recent Periodic Labour Force Survey (PLFS) Report 2018-19, around 47 crore (47%) adults were working in the country. Over half (52%) of the workers were self-employed, followed by casual workers (24% ) and the remaining were regular or salaried (24%). Of these, the casual workers are the most vulnerable due to the irregular nature of their work and daily wage payment based on their work schedule (MHA 2018; MoSPI 2020).
Note: Estimated number of workers given in this table is design based estimates and may be used as control totals for combining and arriving at rates and ratios. These figures are not intended for providing the number of workers. Source: PLFS 2018-19.
According to PLFS 2018-19 estimates, the composition of employment by the type of industry was highest for agriculture (42.5%), followed by other services (13.8%), trade, hotel and restaurant (12.6%), construction (12.1%), manufacturing (12.1%), transport, storage and communications (5.9%), electricity, water (0.6%), and mining and quarrying (0.4%).
As it can be seen from Table 1, the proportion of the self-employed was highest in the sectors of agriculture, trade, accommodation and food services, tertiary sector, transport and manufacturing. While more than four-fifths of the workers were employed as casual labour in construction, the regular wage or salaried earners were highest in services and manufacturing sectors.
Around 7 in 10 workers (68.4%) in the non-agriculture sector were engaged in the informal sector. The deplorable condition of employment can be understood by the status of regular wage/salaried employees in the non-agriculture sector—seven out of 10 had no written job contract (69.5%), more than half were not eligible for paid leave (53.8%), and more than half were not eligible for any social security benefit (51.9%).
Thus, the jobs and earnings of around 200 million workers, including casual workers, regular or salaried workers without any job security and sole self-employed (own account or unpaid family), are at stake. This estimated figure would increase if another 30 million people who are engaged in begging, prostitution and others are also included.
Table 1: Distribution of Working Persons in India in 2018-19 by Employment Type and Industry of Work (Usual Status) (in terms of %)
Livelihood in Lockdown
Choosing between Human Health and Economic Health
In the early days of the pandemic, the daily and total number of reported cases of coronavirus infections remained relatively low vis-à-vis other countries. However, the fear of the rapid spread of the virus came true, and it stands at 10.8 million (as on 4 February 2021), with around 1,55,000 casualties. While, of late, there has been a decline in the daily reported cases and remarkable recovery rates, at one point of time, India had close to 1 lakh positive cases every day.
The inept and crippling health systems and basic infrastructure, inadequate and untrained human resources leading to poor delivery of services added to the miseries, as people remained under a nationwide lockdown.
The irony of the situation was that while there was an acknowledgement of the need for social distancing and self-isolation and the preeminence of human lives and well-being, there were growing concerns over adding to the severity of economic and social impact that the lockdown would have on the country.
This would be especially embossed considering the already prevailing economic slowdown. Cities, as engines of growth, had come to a grinding halt. The reason for this was that the “city-makers” like the daily wage migrant labourers (seasonal and circular) (estimated at over 50 million), street vendors, auto or rickshaw drivers, construction and utility worker found it onerous to survive amid no work and lack of social protection and rights or any proper inclusive policies. Similar was the plight of small businesses as well as freelancers and those operating in the gig economy, who had to bear the brunt of the national lockdown.
On the other hand, big businesses and regular-salaried citizens, though bearing the cost of social distancing, could navigate the rough waters and survive.
Source: Covid-19 Impact: Lockdown and Livelihood in the Lurch | Economic and Political Weekly (epw.in)
Next Steps
Proper vaccination drive the unprecedented consistency of planning and coordination from different stakeholders of the government, inclusion of COVID-19 tests under Ayushman Bharat, free testing in government hospitals and reduction in the prices of tests by private hospitals, procurement of over 50,000 ventilators from the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) fund provided a much-needed respite. Yet, an immediate and detailed strategy for the execution and delivery of services remains veiled.
The urgent need to include healthcare under “Emergency Sector Lending” and execute it on a war footing seems to have gone down well with the government, and the Union Budget 2021-22 provides a whopping 2,23,846 crore for health and well-being. The government still has the task to effectively assuage the apprehensions of the people regarding the efficacy and effectiveness of the vaccine, so as to enhance the vaccination rate given its huge population of 1.3 billion from its present 0.29 doses administered per 100 people (Our World in Data 2021; PTI 2021; Press Information Bureau 2021).
While the total aggregated amount announced for the benefit of its vulnerable sections appears to be huge, yet, per-person benefit comes out to be inadequate. The lockdown was put into place without having a well-crafted strategy, including the assured supply of essential commodities, services especially for medical care, kits, equipment, person power and infrastructure preparedness as well as what happens to the poor and those who lose their livelihoods during this social distancing diktat and COVID-19 fears. In the absence of clear-cut guidelines and proper implementation plans, the implementation of all these announcements appears to be allusive.
There is no proper national-level registry for the poor and people involved in informal jobs or sectors such as vegetable vendors, construction workers, rickshaw pullers, auto-rickshaw drivers and temporary staff, etc. There is an urgent need for these registries to be instituted and updated using latest digital technologies and innovations, along with a dynamic unemployment registry to provide direct economic (universal basic income), health (universal coverage) and other necessary contingency protection and security support.
The government must fast-track the payment of delayed payments to each public and private enterprise in this time of crisis. Further, the utility bills of the most vulnerable must also be paid for by the governments. Also, to ensure that each ward (84,420 in 4,378 cities) and each gram panchayat (2,62,734 in 6,975 blocks and 706 districts) are fully equipped to serve the populace, each of them must be provided with emergency funds from the existing schemes like the Swachh Bharat Mission, Jal Jeevan Mission, etc.
Banks can play a meaningful role during the crisis in two fundamental ways: lending money to companies in distress and recognizing that some companies simply can’t survive. If default rates on current loan portfolios skyrocket, the expected shock to incomes and to supply and demand could compromise the solvency of some banking systems.
Conclusion
Livelihoods need to be saved to boost economic recovery. The people have suffered too much after the pandemic and steps need to be taken to alleviate their issues.
Keywords: Agriculture, Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund, Swachh Bharat Mission, Jal Jeevan Mission, Ayushman Bharat
The author is Shrimanta Satpati, a fresh graduate of economics under the renowned University of Calcutta. He is passionate about public policy and social research and often finds himself dealing with complex humanitarian issues which needs to be analysed and addressed.
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