Economic struggle is what COVID 19 pandemic offers, especially for the informal works

Capstone COVID-19 Migrants State

Minimal assistance was provided by the government, resulting in 80% job loss.

Close to 41 crore people across the country are working in the informal sector of India. They account for almost half of the annual GDP yet, time and over it is them who have been victims of negligence by the government. They are lacking a safety net which otherwise is offered to formal sector employment. The adverse impact of the COVID 19 pandemic has resulted in prolonged livelihood loss, slow revival of trade, deteriorating health, mortgage, loans and diminished employment opportunities. These severe challenges on a daily basis have made them the most vulnerable community.

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The current situation of livelihood of many workers, whether self-employed like the street vendors, waste pickers, auto rickshaw drivers, retail shop owners or working on wages like the domestic workers, garment workers and construction workers has not revived to the levels that were before the pandemic. Alone in Bengaluru city, 15% of these workers are still unemployed, as stated in the report and survey conducted by Azim Premji University. The study also states that there is a decline of over all work participation for men and women.

  Source: Azim Premji University on informal workers

  Source: Azim Premji University on informal workers

During the first wave of the pandemic, the Karnataka CM, announced a relief package under which the workers were given a one-time compensation payment of Rs. 5000 each. Since the government lacks records about the total workforce, this relief scheme was only limited to 85,000 workers, who are registered under the Karnataka State Unorganised Sectors Welfare Board out of approximately 3 crore people working in the sector.

When asked about the scheme, Rama, who runs a food stall in Srirampura said that, “we did not receive any help from the Government. For survival and to run this stall, I took loans, multiple of them. I don’t have savings to back on and as there is no help provided, things are very difficult right now.”  

Minimal efforts were made to register the rest, moreover, the process is cumbersome requiring numerous visits to government office or online registration with proper documents which the workers find difficult to do. The visits will consume their daily income meanwhile online mode is a problem as they are largely uneducated.  Commenting on this, Narayan Kumar, who sells coconuts over a cart said, “I was happy to hear that government was helping. Then they told me I need to get registered, show proper papers, visit the office and only then will I get compensated. It was problematic, I could not leave work as I am alone so I had to manage without it.”

  On May 19th 2021, the CM announced another relief package worth Rs. 1250 crore to assist during the second wave, it is still uncertain as to how many workers will get aided. In the meantime, the workers are trapped in a vicious circle, illustrated below-

The  Budget 2021 of our country fails to do much for these vulnerable groups. Several industries are suffering, most of them closed down as well therefore leaving no space for the workers to earn and sustain life. Out of helplessness, the migrants travelled back to their villages, the number accounting to approximately 67 lakh people as per Skill Development Ministry’s database.

An All-India level NGO, Action Aid Association has been working to provide aid to these people. Talking to a volunteer at the Bengaluru bureau, Nandini said,” the condition in which we found them was horrifying. They had no food or money and a small room for 8-10 people in a family. The government talked about social distancing; how can these people follow such things? They don’t have space to do so. “

Along with providing assistance to the vulnerable groups, Action Aid has also conducted surveys during and after the lockdown to understand the situation better. The reports suggest that 80% of the people lost their jobs and almost 53% of them had to borrow money from either banks or acquaintances to survive the pandemic. Lalitha Srinivasan, another member of Action Aid said that, “most of them were pressured to take loans. They have school going kids and when everything shifted to online mode, they needed to buy at least one phone or compromise on education.”

It also suggests that in India, depleted labour incomes caused by the lockdown could translate into more than 56% of the informal workers living in relative poverty. The workers, had not been earning adequately before the pandemic, they further lost their primary income sources due job loss. At the same time, the prices for essential commodities increased therefore, adding to the daily list of challenges for these people. The following table shows unemployment levels throughout the lockdown-

A crucial feature of this sector is that they are not registered. Hence, the formalisation, maintenance of records may assist in achieving certain goals. Moreover, the government needs to take steps to cover up the soaring unemployment. It needs to implement schemes like MGNREGA which generates job options other than agriculture based jobs to ensure more people are employed.

In conclusion, the government needs to act upon in a way that not only manages the current crisis but also immunes the sector for future. The informal economy is in urgent need of reform. In particular, the pandemic-induced hardships require additional support. The efforts taken by the government to keep an account of this sector — its contribution to the economy and its nature — have been minimal therefore creating an urgent need for building resilience in the informal economy.

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