In the pandemic’s third year, jobs must be the top priority. It’s not enough to depend on any trickle-down theory
When the Union Budget is presented next week, millions of Covid-19 pandemic-battered Indians will be waiting to see how it addresses three intertwined challenges -- the alarming and ongoing unemployment crisis, growing poverty and deepening inequalities.
These are no longer words that the commentariat debates at seminars and webinars. They now have the rawness of lives stripped of hope as layer upon layer of painful realities coalesce.
Anger, rage and despair are spilling onto the streets and railway tracks.
In recent days, we have seen visuals of burning train coaches, and read reports of protests by desperate young job-seekers alleging “irregularities” in the recruitment process of the Indian Railways, one of the country’s largest employers. The protests turned violent on January 26, with a passenger train set ablaze in Gaya. In Prayagraj, in poll-bound Uttar Pradesh, six police personnel were suspended for using “excessive force” against protesters. Some 1.25 crore young people had applied for a little over 35,000 vacancies in the highly competitive Railway Recruitment Board’s Non-Technical Popular Category (NTPC) recruitment exam. The Railways announced a high-level committee in a bid to reach out to the protesters.
Earlier this month, a 50-year-old Noida resident who worked as a security guard at an exhaust fan factory tried self-immolation close to the nation’s Supreme Court. He hadn’t been paid his salary for three months.
Beyond the headline-grabbing extremes is a hollowing out of hope. You can see the deep despair in many people’s eyes. Even in tony localities in the national capital.
Ramesh Kumar, 37, whom I have known for years, has just sold his wife’s gold chain. “She got it as a gift when we got married. I sold it at half the price. I have never ever felt this desperate. Do you think any man would do this if he had any other options?”
Kumar has three school-going children and lives in an unauthorised colony at the edge of Delhi. He works at a beauty parlour in an affluent South Delhi neighbourhood. Before the pandemic’s onset, he earned around Rs 17,000 a month. Tips were extra. It wasn’t an easy life, but he managed. He had dreams for his children.
But Covid-19 changed everything. Lockdowns meant no salary. Kumar and his family survived with borrowed money. Even during the various phases of “unlock”, Covid-19 restrictions led to reduced footfalls in the market and the parlour. Kumar has no work contract; soon after the first lockdown, his bosses said they could not pay the parlour staff a salary any longer; the staff would only get a percentage -- about one-third -- of the business they generated.
For more than a year now, there has been no paycheque at the end of the month. Meanwhile, rents and school fees must be paid. Kumar is deep in debt. The children no longer have milk or fruits even once a week. “I stay up nights worrying about my children. I don’t want them to be doing what I am doing. I want a better life for them. But I’m not sure anymore if that will happen…”
The despair and uncertainty faced by Kumar and millions like him who make up India’s informal sector impacts the broader economy. You don’t have to be an economist to figure out that plummeting wages, further casualisation of the workforce, growing uncertainty over a steady income stream will dent consumption and the knock-on effect will be on investment.
In the pandemic’s third year, jobs must be the top priority. It’s not enough to depend on any trickle-down theory. India’s billionaires have seen their wealth grow at the same time when the income of the poorest are nosediving.
According to a recent survey by People Research on India’s Consumer Economy, a Mumbai-based think tank, the annual income of the poorest 20 per cent of Indian households, which had been constantly rising since 1995, plummeted by 53 per cent in 2020-21 from 2015-16.
During the same period, the richest 20 per cent saw their annual household income grow by 39 per cent, showing just how brutally the pandemic has affected those at the bottom of the economic pyramid.
The pandemic brought the economy to its knees for at least two quarters in 2020-21. The survey, conducted between April and October 2021, suggests that the worst-hit were the urban poor.
Clearly, there was little automatic trickle-down of income. Other data from other surveys also shows the worsening plight of the poor, who live off the informal sector, the mainstay of the country’s workforce.
If people like Kumar have been brought to their knees, one key reason is that the second Covid-19 wave’s shock came before they had time to really recover from the economic impact of the first.
In a December 2021 article, Mrinalini Jha, a post-doctoral research fellow at the Centre for Sustainable Employment in Azim Premji University, makes important observations.
“There was a gap of roughly nine months between the end of the first wave and the coming of the second wave (June 2020 to February 2021). In the first wave, the average all-India monthly per capita household income fell by 44 per cent between February 2020 and April 2020. There was a near-complete recovery in incomes by January 2021 — with per capita household incomes a mere three per cent lower than the pre-pandemic level (February 2020). However, the impact of the second wave began being felt from February 2021, and incomes started falling again before a full recovery could be achieved,” Jha notes.
“All-India per capita incomes fell by 19 per cent over the second wave between January and May this year , with incomes in May continuing to remain 22 per cent lower than pre-pandemic levels.
Economic indicators such as income and employment were the worst affected in May 2021, beyond which recovery started. While the impact of the first wave was felt more acutely in urban areas, that of the second wave was more adverse in rural areas,” she notes.
It is no secret India had a serious job crisis even before the pandemic. The periodic labour force survey (PLFS) of 2017-18 showed that the unemployment rate had hit a 45-year high. Covid-19 just made things much, much worse, especially for the millions at the bottom.
Anger and hopelessness are mounting. The poll-bound states also face acute unemployment crises. The political and policy focus must get back to treating job creation as its top priority. Letting things go on as they are, or diversionary tactics, will have terrifying consequences in the short and long term.