The grave situation emerging from the corona pandemic that is destined to continue for at least 6-7 months, or even till year-end, has not been really grasped by our politicians. The upper echelons of society or even the middle income sections may not be severely affected but the poor and the struggling masses shall, possibly beyond imagination. More so, because there are worrying reports that the corona virus may relapse for a second time!
In such a scenario, when our government is finally trying to bring back migrants to their home States, the question arises what arrangements would be made to take them back to their place of work? These migrants are in a pitiable condition, having exhausted whatever money they had in staying at their place of work for around six weeks without any earnings. But within a fortnight or even one month they may like to return to their place of work.
A job crisis is staring the country and this is manifest in Centre for Monitoring Indian Economy (CMIE) report that found India’s unemployment rate shot up to 23.5% in April. Among large States, unemployment was highest in Tamil Nadu, Bihar and Jharkhand at 49.8%, 46.6% and 47.1% respectively. The unemployment rate for the week up to May 3 showed that unemployment rate had risen even further to over 27%, the highest so far. The estimated loss of employment between March and April 2020 will be 114 million. “Given that the total count of employment is around 400 million, the loss of 114 million implies that one in every four employed persons lost their jobs”, stated its CEO, Mahesh Vyas.
Pronob Sen, former chief statistician, stated recently that the CMIE data was a reflection of what is happening on the ground. Obviously, the most affected are daily wage earners and those with no security in the country, casual labourers forming about 25% of the workforce. Also in the salaried category around 40% do not have job security, implying that they do not have a valid job contract, are not eligible for paid leave and do not have social security benefits. According to another five-country survey by the British research firm, Crosby Textor Group, 86% of those surveyed in the country are worried about losing their jobs and livelihoods due to the pandemic.
It is well known that migrant workers, which include those serving in the informal sector, labour in harsh conditions and are underpaid but can barely leave their contractor because of indebtedness. Thus low wages and hazardous environment would make life difficult for this segment as the pandemic would worsen their plight. There are varying figures of migrant workers between 51 million, as per the last census, but a more realistic figure would be around 120 million in the country, including nearly 60 million seasonal short-term migrants not counted by the enumerators.
Delving into the employment scenario, in agriculture it is distressing to note that 70 million or 48% of all land holdings are smaller than half hectare in size. The average size of these holdings is less than a quarter hectare. A family of five cannot survive on such a small farm even in normal times. Added to this, 42 million or 72% of all enterprises in the country are owned by a single person. The Periodic Labour Force Survey (PLFs) found that only 9% of India’s workers are employed in enterprises with 20 or more workforce. That leaves more than 100 million workers in either smaller enterprises or agriculture, both of which are unviable.
Even in normal times, banks do not necessarily give loan to these small enterprises as they are not cost effective to assess credit worthiness. According to available statistics, Mudra disbursements work out to a paltry Rs 49,136 per account by end November 2019. For a large economy, India is unique in having a large proportion of its workforce deployed in tiny micro economic units, most of which are struggling for survival.
This vividly portrays the conditions of the workforce, mainly the lower segments, which have always been struggling for survival and the situation has aggravated to uncontrollable dimensions, which would continue throughout this fiscal. And keeping in view the Centre’s attitude, which is just encouragement through words but little action and no financial help to any sector of the economy, the unemployment situation may aggravate beyond control.
The whole issue boils down to the fact micro and small units, which could generate maximum employment, have not developed and even the number in a country like ours is insignificant. Moreover, as India lacks cutting edge technology and competitiveness, the SME sector could not dent the export market and improving its performance remains a far cry. Though people are now talking that many units may relocate from China to India, it is difficult to believe this as our government cannot offer the necessary support.
Any tangible action is the need of the day. Several organisations working on rural employment and about 30 concerned citizens have written to Rural Development Minister suggesting the 100-day limit be waived to give willing workers employment for the entire year. They have said that since large number of villagers lack job cards and getting new job cards can be time consuming, anyone looking for work under the rural job scheme should be given employment. Added to this, experts stated that the government should consider giving 10 days’ wages (Rs 2000 approx) per job card.
On the other hand, labour-intensive units should be encouraged with money and marketing support. Transfer of the right technology, whether for small engineering units or chemicals or food processing units, has to be made available with the government bearing the cost. Prospective exports units with a potential need to be encouraged. While experts speak about these and formulate short and medium term plans, only the big players who have strong links with politicians and political parties derive benefits.
Given the recent downgrades in GDP estimates with Japanese investment bank, Nomura (-5.2%) and Goldman Sachs (0.4%) forecasting the economy to contract in the current fiscal, it is difficult to believe that jobs of most migrants and informal sector workers would be secure or safeguarded in the next few months. Even the raising of borrowing limit would have no effect at the micro level unless the government takes positive steps in regard to protecting the livelihood of workers after consultations with acknowledged economists, or else the consequences may be disastrous.