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Article

22 Mar 2020

Author:
Utpal Bhasker, Live Mint

India: Informal workers suffer a sharp drop in income due to virus concerns, forcing them to return to their villages

...With India coming to a standstill and its citizens cooped indoors to prevent the spread of Covid-19 cases, the informal or gig economy has ground to a halt. From those working in restaurants to those making a living ironing clothes in the neighborhood, daily wagers are finding it difficult to make ends meet.

...More than 90% of the country’s workforce is estimated to be in the informal sector. The Economic Survey 2017-2018 had said that 87% of the firms in the country, representing 21% of total turnover, are purely informal, outside both the tax and social security nets.

The “new disease" Kumar refers to is the Covid-19 pandemic, which has caused seven deaths in India and infected more than 386 people so far. His concerns are largely reflective of India’s huge informal workforce.

...The crisis has led to a mass exodus of migrant labour to villages. Many of Kumar's acquaintances have returned to their homes in Uttar Pradesh and Bihar. The situation may worsen given the closure of train services and states locking down. Demand has shrunk, afecting the source of income of daily-wagers such as Kumar...

Even among the informal sector, unorganized workers are the most vulnerable. The Union government could look at having an emergency fund to provide assistance for at least two months...

...The pandemic comes at a time of an economic slowdown in India. Standard and Poor’s has cut its 2020 growth projection from 5.7% to 5.2%, as it fears the Asia-Pacific region may slide into a recession as countries implement strict lockdowns...