Several studies but one conclusion -- poorly planned COVID-19 induced national lockdown hurt the poor the most

The recent Supreme Court of India’s judgments (please click here and here) related to ensuring food security of the migrant and unorganised sector workers through the provision of dry ration, running of community kitchens and proper implementation of the 'One Nation One Ration Card' scheme should come as no surprise to us. A recent review of some of the robust studies, which relied on multi-state surveys (or reference surveys), having a sample size of at least 1,000 and a reasonably clear sampling method, by Jean Drèze and Anmol Somanchi indicates that the majority of the labouring class faced job losses and food insecurity as a result of the pandemic induced 2020 lockdown. Besides, a similar situation was noticed in April-May this year when almost the entire country was under complete lockdown as a result of either partial lockdowns and night curfews or complete lockdowns imposed by the states/ UTs.

In their review of literature, Drèze and Somanchi observe that although a large number of household surveys were conducted by independent research institutions and civil society organisations in 2020, whose compilation is available on the website of the Centre for Sustainable Employment at Azim Premji University (CSE-APU), a select few of these studies can help to broadly understand the impact of the COVID-19 led lockdown on the working class, including migrant workers, informal workers, etc. in terms of income and employment during April-May 2020. 

The results of the Dalberg study, which is broadly consistent with the Centre for Monitoring Indian Economy (CMIE) data, are based on a large (and largely representative) survey across 15 states. The Dalberg survey revealed that the proportion of households affected by income reductions was more than 80 percent in April-May 2020, aside from nearly a quarter of households earning no income at all. The Dalberg study, covering 47,000 households in 15 states, had found that the primary income earners of 52 percent of households were unemployed in May despite having a job prior to the lockdown, and another one-fifth of the primary earners of households were still employed but earning less than before. Like other studies, the Dalberg study had noted that urban households were worse hit than rural households.

The “IDinsight+” survey, covering nearly 5,000 rural households in six states, revealed that the average weekly income of non-farm respondents drastically came down from Rs. 6,858 in March 2020 to Rs. 1,929 in May 2020, which remained around that level even in September last year. The proportion of non-farm respondents who reported zero days of work went up from 7.3 percent in early March 2020 to almost 23.6 percent in the first week of May 2020 and remained as high as 16.2 percent in the first week of September last year.

 
---

The CEP-LSE survey, covering 8,500 respondents in urban areas of Bihar, Jharkhand and Uttar Pradesh, had observed a sharp increase in unemployment – from 1.9 percent prior to the lockdown to 15.5 percent in May-July among those aged 18-40 years. The study found that while the average income in the sample decreased by 48 percent (see table-1), the share of the total income going to the top quartile went up from 64 percent to 80 percent, thus indicating further worsening of income inequalities.

The study by the Centre for Sustainable Employment, set up by the Azim Premji University to conduct and support research in areas of work, labour, and employment, had found that almost one-fifth (i.e. 19 percent) of informal-sector workers who had a job before the lockdown were unemployed in September-November 2020 (the corresponding figures for men was 15 percent and women was 22 percent, thus indicating gender gap in job losses). The rest, however, had more or less recovered their pre-lockdown earning levels. Other surveys too corroborated the fact that employment losses were worse for women in comparison to men.

Drèze and Somanchi state that large-scale unemployment and massive income losses were witnessed not only during the period of nationwide lockdown but throughout the rest of last year. They draw the conclusion from their review of literature that income and employment did not recover to attain their pre-lockdown levels even before the second wave of the COVID-19 pandemic hit India in early 2021. 

Job losses and fall in incomes contributed to food insecurity among the workers. Although the surveys done by various individuals and agencies are not strictly comparable, they clearly suggest prevalence of severe food insecurity during the countrywide lockdown. For example, the IDinsight study had observed that almost a quarter (i.e. 26 percent) of the rural households they surveyed were eating less than usual during May 2020. The CSE-APU survey had noted that the proportion of households eating less than before the lockdown remained as high as 60 percent in October-December last year, as compared with 77 percent during the 2020 nationwide lockdown (i.e., in April-May 2020). A survey done by ActionAid reported that nearly one-third (i.e. 34 percent) of 11,537 informal workers (comprising mainly the migrant workers) were eating less than two meals a day in the month of May last year. The survey titled Hunger Watch by the Right to Food Campaign, which was conducted among 3,994 respondents (comprising mainly Scheduled Caste-SC and Scheduled Tribe-ST persons, particularly vulnerable tribal groups-PVTGs, slum dwellers, single women, households with disabled persons, daily wage labourers, etc.) from 11 states, revealed that for two-thirds of the respondents, the quantity of food had either decreased somewhat or decreased a lot in September-October 2020 as compared to before lockdown.

Drèze and Somanchi have found that in the five large-scale multi-state surveys, the proportion of households with a ration card (mainly the NFSA cardholders) ranged between 75 percent and 91 percent. A vast majority of the population could access the Public Distribution System (PDS). Only a significant minority of ration-card holders did not receive any foodgrain rations during the reference period (pertaining to various surveys). The poor households were more likely to access the PDS. The proportion of respondents who had received some foodgrain from the PDS during the reference period (provided that they had ration cards) was higher than 80 percent in all the surveys (except the Gaon Connection survey), and higher than 90 percent in four surveys. 

In order to help the poor during the COVID-19 lockdown, the Government of India on 26th March, 2020 declared that an ex-gratia monthly payment of Rs. 500 would be given to women Jan Dhan account holders for the next three months, starting from April. Many households did not receive the cash transfer of Rs. 500 in the Jan Dhan Yojana (JDY) accounts in April-June 2020. It is because they did not include an adult woman with a JDY account. Low awareness levels and lack of clarity on rules and eligibility led to a significant proportion of the potential beneficiaries not receiving the cash transfers in their JDY bank accounts, indicates the literature survey. Account dormancy, transaction failures and vulnerability to fraud were also responsible factors behind the failure of cash transfers getting deposited in the bank accounts of the beneficiaries. The JAM (Jan Dhan, Aadhaar, Mobile) infrastructure is not yet fully developed to rely upon for cash transfer, say Drèze and Somanchi. Only a small proportion of the income losses suffered by the poor and the working class during the 2020 national lockdown was compensated by the cash transfers made by the Government of India.

Because of the limited and unreliable relief measures given during the national lockdown, households' indebtedness grew last year and they went for distress sale of household assets. In order to sustain themselves, people borrowed money or deferred their payments during the period of national lockdown.  

The authors advocate for a stronger relief package in order to avoid a repeat of last year’s tragic humanitarian crisis. Instead of taking ad hoc and short term measures, the Government should go for providing durable entitlements, suggest Drèze and Somanchi. One of the biggest lessons to be learnt from the COVID-19 crisis is that the country needs a more reliable and comprehensive social security system for the unorganised sector workers, the poor and the marginalised. 
    
References

ActionAid Association (2020): Workers in the Times of COVID-19, Round-I of the National Study of Informal Workers (survey conducted in May 2020), please click here to access [cited in Drèze and Somanchi (2021)]

Centre for Sustainable Employment (2020): COVID-19 Livelihoods Phone Survey, Azim Premji University, please click here to access [cited in Drèze and Somanchi (2021)]

------------------- (2020): Results of Round 1 (April-May 2020), please click here to access [cited in Drèze and Somanchi (2021)]

------------------- (2020): Results of Round 2 (October-December 2020), please click here to access [cited in Drèze and Somanchi (2021)]

Centre for Sustainable Employment (2020): Compilation of studies on the impact of pandemic induced 2020 lockdown on employment and livelihoods, Azim Premji University, please click here to access

Dhingra, S and F Kondirolli (forthcoming), ‘City of Dreams No More, A Year On: Worklessness and Active Labour Market Policies in Urban India’, Centre for Economic Performance, London School of Economics [cited in Drèze and Somanchi (2021)]

Drèze, Jean and Somanchi, Anmol (2021): The COVID-19 Crisis and People’s Right to Food, released on 31st May, Open Science Framework, please click here and here to access

IDinsight, World Bank and Data Development Lab (2020), “COVID-19 related shocks in rural India: Rounds 1-3”, please click here to access (Unit-level data downloaded from World Bank’s Microdata Library, please click here to access), [cited in Drèze and Somanchi (2021)]

Right to Food Campaign (2020): Preliminary results of the Hunger Watch Survey, released on 9th December, 2020, please click here to acccess [cited in Drèze and Somanchi (2021)]

Supreme Court of India (2021): Judgement dated 29th June, 2021, which is related to the Writ Petition (C) No.916 of 2020, please click here and here to access  

Supreme Court of India (2021): Judgement dated 24th May 2021, which is related to the suo motu writ petition (civil) 6/2020 IA no. 58769/2021, please click here, here and here to access

Totapally, S, P Rao, P Sonderegger and G Gupta (2020), ‘The efficacy of government entitlements in helping BPL families navigate financial impacts of COVID-19’, Dalberg, please click here to access [cited in Drèze and Somanchi (2021)]

Press release: Finance Minister announces Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus, Ministry of Finance, dated 26th March, 2020, Press Information Bureau Delhi, please click here to access

Image Courtesy: MKSS India