The imposition of a complete lockdown by the Indian government in March 2020 to prevent a rise in COVID-19 infections has had a substantial impact on the country’s economy and health. Over the past one year, a large proportion of Indians, mainly the socio-economically marginalised, have found it difficult to find jobs, feed their families and access basic healthcare. To address these problems, the government has taken a variety of measures, including the introduction of new policies in the 2021 Budget. The efficacy of these initiatives, however, is yet to be seen.
On 24 March 2020, the Indian government announced a sudden 21-day nationwide lockdown owing to the COVID-19 pandemic. The lockdown, which was extended to 68 days, imposed the shutdown of all commercial, industrial and transport activity. Since then, various state governments have imposed curfews and lockdowns in areas experiencing a spike in the number of reported COVID-19 cases. According to the Stringency Index developed by Oxford University, India’s lockdown was among one of the harshest lockdowns worldwide.1 This paper examines the impact of this on the country’s most vulnerable populations using three indicators – employment, health and nutrition – and the response of the central government in these respects.
India, like all low-income countries, is particularly vulnerable in a lockdown for three reasons: first, it has a large proportion of households that rely on casual employment – about 20 per cent; second, the size of its informal sector, where about 80 per cent of the total workforce contributes to over 50 per cent of its gross domestic product; and third, low median household savings that are inadequate to take 38 per cent of all households through a 21-day lockdown, let alone a 68-day one, as it eventually lasted.2 More generally, the large proportion of Indian families in poverty – about 61.7 per cent3 as of 2011 – translates into a high degree of financial insecurity and vulnerability to shocks.
Notably, the other South Asian countries opted for a different path. Pakistani Prime Minister Imran Khan said, “If we were like Italy, France, America or England, I would have locked Pakistan down completely. But our problem is that 25 percent of Pakistanis are below the poverty line…If working class Pakistanis are locked up for two weeks, how will they feed their families?”4
This well captures the dilemma that governments the world over had to face. While a lockdown protected the socio-economic elites who could afford to isolate, and put at risk those at the bottom of the pyramid who could not make a living, a decision not to lock down carried the risk of a gigantic health crisis. India chose the former path.
Employment:
The impact of the lockdown on employment was massive, and uneven by sector. Employment in agriculture did not decline. Instead, by September 2020, it had shown a 5.5 per cent increase from the previous year. Employment in the services sector and manufacturing sector contracted sharply by 18.4 per cent and 38 per cent respectively between March and June 2020, before recovering partially.5
The data on employment is worrying for two reasons. First, every sector except agriculture was severely impacted by the lockdown. Given a low saving capacity among the majority of the population, and the fact that at least 121 million people lost their job during April 2020 alone,6 an inordinately large number of people would have gone through a phase of high financial insecurity and possibly food insecurity. Furthermore, rural areas – where poverty rates are higher and wage rates are lower – had to sustain the double shock of less income coming from remittances and a new need to sustain the returning migrants from cities.
Second, the increased employment in agriculture could mean good agricultural conditions during the year and/or shrinking employment opportunities in non-agricultural sectors. This shift from high-productivity jobs in manufacturing and service sectors to low productivity sectors like agriculture, along with the sharp contraction of the real wages for informal workers (estimated at around 22.6 per cent),7 may translate into lower incomes for a sizeable section of the population in the coming years – a sign that does not bode well for a developing country like India.
To address the sudden job losses, the Indian central government launched a new rural public works scheme – Garib Kalyan Rojgar Abhiyaan (a massive rural public works scheme) – in 116 districts across six states in the country.8 In fiscal year (FY) 2020-21, the government also increased the allocation under Mahatma Gandhi National Rural Employment Scheme by ₹400 billion (S$7.3 billion).9 Considering that this scheme is the primary anti-poverty vehicle of the government that ensures up to 100 days of paid work per year for adults, the move was a lifeline. However, over 25 per cent of its total allocation was used to liquidate the outstanding dues from previous years.10
Despite increases in the allocation over the years, expenditures have continued to be higher than the funds available. Further, while there was an increase in the notified wage rate from ₹182 to ₹202 (S$3.29 to S$3.65) under the Atmanirbhar Bharat Abhiyan (Self-Reliant India) campaign, the actual wages paid by 15 states in FY2020-21 remained lower than the notified wage rate.11
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