Contributed by Yusuf

“Corona se bach kar bhook se marenge to kya fayda?” (What good is it if we are saved from Coronavirus only to starve to death?) Kulsum* quipped, only half jokingly, after we exchanged greetings from a safe distance, next to her bamboo-and-plastic shack.

This was back in April, early in the lockdown, which had stripped millions of people of their livelihood. Government and NGO relief measures had only started reaching people, and were proving entirely inadequate.

Fast-forward to October, and the country has had over 7 million cases. While daily cases are dropping now, India remains vulnerable. The virus has impacted the life of every Indian. Yet rather than bring the nation together, this calamity has highlighted and deepened the profound inequalities within Indian society. With the country now in ‘Unlock 5.0’, the wealthy and middle-class have been able to resume a degree of normalcy. Meanwhile the underprivileged remain severely impacted, struggling for their livelihood, health and education; women particularly are feeling the brunt of the crisis.

It is critical for government and civil society to understand the effects that the crisis has had on the poor and marginalised, to be able to design policies and programs which soften the blows. Here I outline the severe impact on livelihood experienced by the urban poor. Three further parts of this series will consider health care, education and gender norms.

Stifled livelihood

During the lockdown, the urban poor, who predominantly work in the informal sector, were devastated by a near-total loss of income. Those in the formal sector were usually able to switch to working from home, and continued receiving salaries; but it is impossible for street vendors work from home! How (most of) the poor managed to survive through this period is a testament to their ingenuity and resilience.

While most offices and businesses have now reopened, the economy remains hammered, having contracted by a mindblowing 24% in the 2nd quarter of the year. Unsurprisingly, many people who were self-employed entrepreneurs have been unable to successfully restart their micro-businesses. They identified two glaring problems: (a) they have, by necessity, eaten away what little capital they had; (b) demand remains extremely low, as people have very little disposable income. The economic crisis precipitated by Covid is by no means over; many of the poor are still sinking deeper into debt and destitution.

Policy suggestions:

1. Governments should consider an urban NREGA[1]-style employment provision, given the unprecedented scale of the crisis. Much as Western nations are demanding a green recovery, India could invest heavily in renewables, energy efficiency, education and healthcare to generate significant macroeconomic stimulus.

2. Governments and NGOs should expand and create more microfinance programs, to assist people in restarting their businesses.

Conclusion

Coronavirus has shaken the whole nation, but its ramifications have struck the poor particularly hard. Livelihoods of those working in the informal economy have been shattered. We must urgently act to restore the basic rights to livelihood.

[1]          National Rural Employment Guarantee Act (NREGA), 2005, is a landmark piece of legislation guaranteeing every rural family in India the right to 100 days of paid employment from the state. Families often take this when less labour is required in the farms, and the state uses their labour for public works projects.

* Names changed for privacy.

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