By K Raveendran
When Prime Minister Narendra Modi announced during his national television address that Finance Minister Nirmala Sitharaman had been asked to prepare an economic support plan to help people to tide over the crisis, it was obvious that any plan that addressed the core issue would not be forthcoming any time soon. She has not sprung any surprise.
As expected she is still busy with her favourite consultations. She was supposed to meet with the Prime Minister on Friday to finalise the second stimulus package that was meant to address more mundane issues of poor and vulnerable sections of the society, including migrant labourers, who unfortunately do not belong to any of those ‘defined’ India.
No announcement has yet been made as to when the plan is likely to be unveiled. No schedule has been announced even for the next round of the finance minister’s consultations with the Prime Minister.
It was clear within days of the announcement of the national lockdown to fight the coronavirus outbreak, in which the country has achieved significant success, that the most vulnerable people do not figure in the scheme of things. They were supposed to stay put wherever they were, in an ‘as is, where is’ condition, so to say.
The stimulus packages announced so far to provide a cushion to absorb the devastating effect of coronavirus on the economy have so far excluded this category of people, primarily because these people fall outside the universe of policy planners. Every stimulus package has been found to benefit the organised sector, which is natural because it is easy to reach out.
The informal sector, which actually constitutes the biggest chunk of the economy, unfortunately do not enjoy any clout with the Establishment and as such they have no voice worth listening to. At least it is too feeble to be heard by finance ministers like Nirmala Sitharaman.
The International Labour Organisation in a post-Covid outbreak assessment estimated that about 400 million people in India’s informal economy are at risk of falling deeper into poverty during the crisis. Current lockdown measures in India, which are at the high end of the University of Oxford’s COVID-19 Government Response Stringency Index, have impacted these workers significantly, forcing many of them to return to rural areas, ILO said.
Like in many other low and middle income countries, the informal economy in India contributes to jobs, incomes and livelihoods, but the workers lack the basic protection that formal jobs usually provide, including social protection coverage. They are also disadvantaged in access to health-care services and have no income replacement if they stop working in case of sickness, ILO noted.
They also carry a high risk of virus infection and are directly impacted by lockdown measures. Particularly vulnerable are waste recyclers, street vendors and food servers, construction workers, transport workers and domestic workers.
ILO has identified a number of key economic sectors as suffering from a drastic fall in output, including accommodation and food services, manufacturing, wholesale and retail trade, and real estate and business activities .These sectors are labour intensive and employ millions of often low-paid, low-skilled workers, particularly in the case of accommodation and food services and retail trade. The economic risks will be felt particularly hard by workers in these sectors.
The agency said that globally businesses across a range of economic sectors are facing catastrophic losses, which threaten their operations and solvency, especially among smaller enterprises, while millions of workers are vulnerable to income loss and layoffs. The impact on income-generating activities is especially harsh for unprotected workers and the most vulnerable groups in the informal economy.
It stresses that policy responses need to focus on providing immediate relief to workers and enterprises in order to protect livelihoods and economically viable businesses, particularly in hard-hit sectors and developing countries, thus ensuring the conditions for a prompt, job-rich recovery once the pandemic is under control.
Sharp and unforeseen reductions in economic activity are causing a dramatic decline in employment, both in terms of numbers of jobs and aggregate hours of work. Economic activity across whole sectors has been severely curtailed, leading to steep declines in revenue streams for many businesses. With increasing numbers of partial or total lockdowns in place that restrict operations of business and movement of the vast majority of workers, for many it has become impossible to work; others have experienced dramatic alterations in their methods of work. (IPA Service)