The CMIE data showing rise in unemployment in urban areas by more than 22 per cent between March 22 and April 5 confirms that the lockdown prompted by coronavirus will wipe out the tremendous gains made by India in being the only country apart from China to lift millions out of poverty in the past three decades.
Between 2006 and 2016, 271 million came out of poverty in India. The future of many now is uncertain with the lockdown leaving hundreds without jobs, and sending them back to villages or small towns.
The CMIE data on unemployment for urban India for the week ending April 5 was 30.93%, up from 8.66% in the week ending March 22. An estimated 50 million people are believed to have lost their jobs in just two weeks of the lockdown. An International Labour Organisation report Tuesday said the COVID-19 crisis would push around 40 crore workers in India’s informal sector — comprising a bulk of the country’s economy — deeper into poverty.
Says economist and former member of the Planning Commission Dr Abhijit Sen, “The entire reduction of poverty in India was premised on the growth of jobs in sectors such as construction and exports and services. Low-skilled and even slightly educated persons were able to secure jobs there. Ultimately, this was based on the dehaadi (daily wages) model. We did very little on the healthcare side, and if there is even a slight slippage in people’s ability to make the day’s wage, there is the danger of a big slide back into poverty. The number of poor apart, the ones who are vulnerable economically are many more… and this was not an unknown.” Follow Coronavirus LIVE news updates
Chandan Kumar, a member of the National Minimum Wage Advisory Board, points out that the informal workers hurt suddenly and hard by the lockdown constitute “93% of our work force”. Also a coordinator of the Working Peoples’ Charter, a forum of trade unions, he adds, “One blow can destroy their lives, and if it happens to lakhs, you just need to do the maths to know how deep the cut is.”
Dr Rathin Roy, till recently a member of the PM’s Economic Advisory Council, says the government must not let the COVID-19 crisis impact “India’s very successful war on poverty”. “So the focus must be on income support to the poor and vulnerable — the migrant labour, landless agricultural workers and those in the informal sector. With the GDP declining, this is a daunting challenge that requires a societal, not just governmental, response.”
At a government shelter just outside Pune, 28-year-old Matadin Dhankar is losing hope. He spent four-five months a year in Pune, picking up jobs in the construction business, earning around Rs 950 daily. Speaking to The Indian Express over the phone, he said all he had was half-a-day of wages when the lockdown came. “I had no money for rent or food beyond a couple of days. I started walking, but was caught by police within hours and moved to this shelter.”
Chhagan Pawar (40) is staying with 90 others 2 km from their home in Beed district of Maharashtra, with villagers afraid of letting them in due to coronavirus. They are back from a sugarcane farm in Sangli, where they worked four months a year. “The lockdown has turned our lives upside down. We never had any savings, lived off what we earned,” he says.
NGO Jan Sahas said a phone survey by it of 3,196 migrant labourers in North and Central India between March 27 and 29 showed that 42% had no money for even a day’s rations, and virtually none would have any money for rations after a month.
A UNDP report on multi-dimensional poverty in 2019 had acknowledged that in lifting 271 million people out of poverty between 2006 and 2016, India had recorded “the fastest reductions in multi-dimensional poverty index values… with strong improvements in areas such as assets, cooking fuel, sanitation and nutrition”.
However, how vulnerable many of them remain, particularly to any health emergency, has been underlined by successive studies. A report by the Public Health Foundation of India (PHFI) published in the British Medical Journal in 2018 found that health expenses drove 55 million Indians into poverty in 2011-12 alone. Of these, 38 million were impoverished by expenditure on medicines alone.
On a setback from COVID-19, Dr Sakthi Selvaraj, Director, Health Economics, Financing and Policy at PHFI, says, “Such a cost would be absolutely impossible even for a middle class at lower or medium end. When a household spends about 10% of their income in a year on medical spending, it is considered catastrophic. Therefore, for a lot many middle-class patients, a COVID case will be catastrophic.”
This is what worries Santosh Jadhav, 26, now back in Talkhed village in Beed district. Employed in sugarcane-related work in Kolhapur, he earned Rs 60,000 every season with his wife. He took an advance of Rs 1.6 lakh, and doesn’t know how he will pay it back. “Where do we raise money for a medical emergency or some other need?” he says.
Dr Sen believes that the government has an opportunity to set right the neglect of health sector. “So far, we seem to be handling the coronavirus pandemic like a police job, not a health, curative or preventive task. If India opts for deeper health investments, we can make it about fighting both poverty and the health crisis, a more permanent renewal.”
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