The poorest have been worst hit by pandemic
- Azim Premji University carried out a lockdown survey in April and May of 4,942 workers. Six months later (September-November), we revisited the same workers and managed to interview 2,778 of them.
The first part of this series presented a macro picture of India’s labour market situation until December 2020 to argue that even though a recovery is underway, significant challenges remain – one reason there needs to be a larger fiscal support in the forthcoming budget. While doing this, it is important that the condition of the poorest sections of the population, who live on the margins even in normal times, is given special attention. For this, nationally representative surveys such as the Consumer Pyramids Household Survey (CPHS) by CMIE can be usefully supplemented by targeted surveys of poor and vulnerable households.
With this in mind, Azim Premji University carried out a lockdown survey in April and May of 4,942 workers. Six months later (September-November), we revisited the same workers and managed to interview 2,778 of them. Telephone interviews were conducted across 12 states with the help of six partner civil society organisations.
Our sample is very different in composition from that of CPHS, with a greater representation of informal workers, lower caste workers, women workers, and low-income households (see table). Even though findings from this survey cannot be generalised to the entire population, they present a snapshot of Covid-19’s impact on those at the margins.
1. Extent of employment recovery
The survey provides information for the same individuals in February, just prior to the lockdown, in April-May during the lockdown, and in September-November, six months later. Workers are considered employed if they reported working even a single day in a month. Even with such a low bar, 69% of those employed in February had lost work during the lockdown. Even six months later, 19% were still out of work. That is, they did not find even one day of work in the month preceding the survey. If we apply a more stringent criterion of employment, of at least 15 days of work in a month, we find that, for every 100 workers employed in February, 35 were out of work post-lockdown. Given that these individuals come from poor households, such continued high levels of unemployment are of great concern.
Of the workers interviewed over this period, 26% remained employed throughout, 55% managed to recover from job losses suffered during the lockdown while 15% registered no recovery at all (i.e. could not find even one day of work in a month). A further 5% had lost employment after the lockdown.
Women fared worse than men with a smaller share registering employment recovery in the post lockdown period (53% versus 57%). Employment recovery was found to be more robust in urban areas than in rural areas. But a relatively higher share of urban respondents had not yet recovered from employment loss – a clear indication that urban areas have been much worse hit despite a quicker bounce back.
2. Increasing precarity, loss of earnings, and food insecurity
While it is useful to know whether people have started finding work, to get a fuller picture of recovery, we also need to know the type of work as well as their earnings with respect to pre-lockdown levels.
Since a large fraction of our sample was still out of work six months after the lockdown, on the whole, earnings were half of what they used to be. The situation was worse in urban areas, overall earnings being only 40% of pre-lockdown levels. But the good news is that if we look at only those workers who were working post-lockdown (i.e. leaving out the unemployed), their earnings have recovered to pre-lockdown levels.
Some better off workers (with regular salaries) had to resort to more precarious and poorly paid types of employment; 60% of those employed as regular salaried workers before the lockdown shifted to self-employment and casual forms of work in the post lockdown period. For such workers, post-lockdown earnings were only 75% of pre-lockdown earnings.
The level of food insecurity is clear from the fact that 90% of respondents reported a reduction in food intake during the lockdown. Of these, in the second round, 30% reported that their food intake had returned to pre-lockdown levels. A further 40% noted that there was partial recovery. Urban households once again were worse off with 28% reporting that food consumption was still at lockdown levels as against 15% of rural households.
3. Reach of relief measures and support
Public distribution system (PDS), Jan Dhan cash transfers and Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) constitute the core support elements for informal sector households during the pandemic. The Pradhan Mantri Garib Kalyan Yojana provided 10kg of rice or wheat per person (5kg in addition to the usual quota, free of cost) to below poverty line and Antyoddaya Anna Yojana scheme beneficiaries until November. BPL families, which constitute close to two-thirds of our entire sample, on an average received 29kg of grain in October and November, though given their household size, the monthly entitlement should have been around 44kg. We found that 99% of BPL households (who constitute close to two-thirds of our entire sample) had received some ration via PDS in the past month. But 13% of these households had received less than 5kgs of wheat/rice per person while 45% received the exact NFSA quota of 5kg of grains per household member. The remaining 41% of BPL households got more than 5kg of grains per person i.e. they had received some free ration under the PMGKAY. But, not all of them got the full quota announced under PMGKAY. 13% got more than 5kg per person but less than the entitled 10 kg per person.
Coming to direct cash support, the survey found that 70% of Jan Dhan account holding families received transfers. However, the Jan Dhan transfers of .500 per month for three months were not adequate given the fact that even respondents whose households did receive the transfer, had post-lockdown incomes that were lower on average by .1,200 per month, not to mention lost earnings in the intervening period.
MGNREGS has been a significant safety net for rural workers and returning migrants during the pandemic. The MGNREGS national database shows that as of November, number of person days generated under the scheme was 43% more than the previous year (See chart). However, our results suggest that there continues to be a huge unmet demand for MGNREGS work.
Since April, only 55% of those who demanded work under the programme were able to get it. 98% of those who got work said they would like to work for more days if work was available. At the national level, the MGNREGS database indicates an unmet demand of 13%. To be sure, official figures of unmet demand under MGNREGS have been questioned in the past. The survey also asked urban respondents if they would consider working in an urban employment guarantee scheme. 51% (going up to 67% among casual workers) answered in the affirmative.
Budget must give a fiscal stimulus without rolling back MGNREGS and PDS hikes during the pandemic
The findings from the CPHS-CMIE survey reported in the first part underlined the need for an overall fiscal stimulus to boost jobs and incomes. The APU survey shows that any such stimulus should not roll back the hikes in MGNREGS and PDS spending announced during the pandemic. If anything, there is a need to increase this. In addition, an urban employment guarantee programme should be considered.
(Paaritosh Nath and S Nelson Mandela are Research Fellows at Azim Premji University. Aishwarya Gawali is a Research Associate at Azim Premji University.)