When India imposed its overnight lockdown, it adversely affected middle and lower income communities with daily workers, domestic workers and retail sector employees among the worst affected. The impact of this continued at least till October 2021, as per a study conducted by Azim Premji University along with nine other civil society organisations. The study focused on Bengaluru’s urban poor and surveyed close to 3,000 households in 92 settlements across the city’s eight wards. Gaurav Gupta from the Centre for Sustainable Employment at Azim Premji University said that the purpose of the survey was to get a snapshot at different points in time of the impact of the COVID-induced lockdown, as macroeconomic indicators do not give an adequate picture of how the informal economy fared.
The survey’s release event, which saw a panel discussion by various stakeholders, said that the people who keep the city running had been failed by the system, whether in terms of social scrutiny, economic security or healthcare.
The study’s primary findings pertained to income and employment, debt and food security, and reach of government relief measures. The survey found that a majority of people experienced a shock when the lockdown was imposed, where 41% of workers had no work and another 21% had reduced earnings even as of January, February 2021.
Even seven months after the first lockdown was lifted, unemployment continued to remain above pre-COVID levels at 47%. This rate had recovered only by October 2021, when unemployment rates returned to pre-COVID levels of 22%. Even by October, 11% of workers had not recovered from the job loss, and women were more adversely affected as compared to men at 15.8%.
In Bengaluru, existing poverty levels rose due to COVID-19. As per the recommended national wage of Rs 119 per person per day as per the Anoop Satpathy committee, poverty rose to almost 80% before falling to pre-COVID levels of 67% by October 2021.
However, while unemployment eased, incomes continued to be impacted. Monthly earnings, which were low even before the pandemic (Rs 9,400 per month), fell even lower for many months (Rs 8,450 per month as of Jan/Feb 2021). By October 2021, earnings had recovered in nominal terms (Rs 9,304 per month) but adjusted for inflation, they continued to be below pre-COVID levels. “This means that surveyed households have endured almost 19 months of job losses and depressed earnings,” the survey stated.
To offset this, people naturally turned to borrowings. 11% of the survey respondents were forced to borrow or repay old loans, and 12% of households wanted to borrow but did not have access to these loans (higher in Muslims and OBCs). Households which did not borrow either sold or pawned off things they owned — with jewellery the most common at 97%. A lot of borrowing relied on informal sources — such as local moneylenders, family or employer — as well.
Due to reduced income, 40% reported a lower food intake as well
The study, which looked at the effectiveness of government programs during the COVID-19 period, found that the public distribution system (PDS) was the most effective. Over half the households surveyed who had BPL cards received additional grains for all months since the second lockdown till the time of the survey in November 2021. Around 32% of respondents said they got additional grains in some months.
However, cash transfers did not prove to be effective in combating the effects of the pandemic. As part of the Pradhan Mantri Jan Dhan Yojana, 78% of the respondents were found not to have a woman-owned Jan Dhan accounts. Of the ones who did have an account, only 40% reported to have received the full Rs 1,500 that was promised. The Karnataka government had also announced schemes, but only 3% of respondents reported receiving any benefit for cash schemes.
It’s not that cash transfers are not an important aspect. However, the lack of reach and the inadequate amounts ensured that its ends could not be achieved, the survey stated.
A positive impact was seen in terms of mid-day meals and Integrated Child Development Services (ICDS).
The findings said that livelihood impacts of the pandemic have persisted far beyond the lockdowns. Without greater support, factors such as the long period of depressed earnings, lower food intake and debt/sale of assets will continue to hamper the ability of households to recover from the pandemic, it suggested.
Amit Basole from Azim Premji University said that problems have continued well beyond the lockdowns and are long term issues. Even if jobs come back, debt burden and other effects (health, education, nutrition) are long term, the survey said. Those behind the survey suggested that cities need a programme similar to the MGNREGA, and also that creative ideas are required to reach a larger number of households for cash relief.