The ‘State of Working India 2021: One Year of Covid19’ report has been recently published by Azim Premji University’s Centre for Sustainable Employment, Bengaluru. This annual report explores the period from March 2020 to December 2020 and examines the impact of a year of Covid-19 on various factors such as employment, income, inequality, and poverty in India.
Impact on Employment
The report revealed that during the April-May 2020 lockdown period, 100 million jobs were lost. While most of these workers had regained employment by June 2020, approximately 15 million still remained jobless.
Income Effects
The pandemic caused a significant drop in income levels. In October 2020, the monthly per capita income for an average household of four members was Rs. 4,979. This amount showed a decrease from its January 2020 level of Rs. 5,989. On average, worker’s monthly earnings dropped by 17% during the pandemic period. Self-employed and informal salaried workers experienced the most significant loss in earnings.
Informalisation
Post-lockdown, almost half of the salaried workers transitioned into informal work. Around 30% became self-employed, 10% shifted to casual wage, and 9% moved to informal salaried roles.
Regressive Nature of Economic Impact
The economic effects of the pandemic were regressive in nature. The bottom 20% of households did not earn anything in April and May 2020. Meanwhile, the top 10% of households suffered the least during the lockdown, losing only about 20% of their February income.
Disproportionate Impact on Women
The pandemic affected women more severely compared to men. During and after the lockdown, only 19% of working women stayed employed while 47% suffered permanent job loss. In contrast, 61% of working men remained employed, with only 7% losing their jobs permanently.
Increase in Poverty Rate
The pandemic-induced job loss and dip in earnings led to a significant increase in poverty. To cope, households had to reduce their food intake, sell their assets, and borrow money from friends, relatives, or moneylenders. During the pandemic period, 230 million people fell below the national minimum wage threshold of Rs. 375 per day, leading to an increase in the poverty rate by 15 percentage points in rural areas and almost 20 percentage points in urban regions.
Suggestions for Recovery
The report suggests several critical policy measures to support the population dealing with India’s worst humanitarian crisis in years due to the ongoing second wave of Covid-19. Key recommendations are the extension of the additional Public Distribution System (PDS) entitlements under Pradhan Mantri Garib Kalyan Yojana (PMGKY) till year-end. Cash transfers of Rs. 5,000 for three months to vulnerable households using the existing digital infrastructure is another suggested measure. Also, there is need to expand the allocation of MGNREGA, launch a pilot urban employment programme in hardest-hit districts, and announce a Covid-19 hardship allowance for 2.5 million Anganwadi and ASHA workers who have actively participated in managing the grassroots Covid-19 crisis.
