Covid-19 pandemic may push 400 mn Indians deeper into poverty, warns ILO
MOUNTING STRESS Economists have warned things could worsen in rural India due to reverse migration since lockdown
NEW DELHI: As many as 400 million Indians, including migrant workers and daily wage earners, are at risk of being pushed deeper into poverty because of t he covid- 19 pandemic, t he International Labour Organisation said, terming the crisis as the most severe since the Second World War.
The pandemic is likely to impact 2.7 billion workers, or 81% of the world’s workforce, the Geneva-based body said on Wednesday.
The unemployment scenario is unlikely to improve in the second half of 2020, ILO said, adding that it estimates working hours will decline by 6.7% in the second quarter of 2020, which is equivalent to 195 million fulltime workers. The forecast indicates that there may be lasting economic damage from the shock caused by the covid-19 pandemic, i ncluding widespread joblessness. Loss of wages, in turn, is likely to trigger a slump in demand.
India, which has a relatively high proportion of workers outside the formal workforce, need to be on guard as workers are facing a drastic reduction in working hours, wage cuts and layoffs, the ILO said.
“I n I ndia, with a share of almost 90% of people working in the informal economy, about 4 0 0 mill i on workers i n t he informal economy are at risk of falling deeper into poverty during the crisis,” ILO said.
“In India, Nigeria and Brazil, the number of workers in the informal economy affected by the lockdown and other containment measures is substantial. 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,” it added.
The ILO warning corroborates local data, which shows that unemployment rate has spiked i n I ndia i n a span of weeks. The Centre for Monitoring Indian Economy’s weekly tracker survey showed that the unemployment rate shot up from 8.4% in mid-march to 23% i n t he week e nded April 5 , reflecting job losses because of t he 2 1 - d a y l o c k d o wn t hat started on March 25. While urban unemployment rate was 30.9%, the rural unemployment rate was over 20%, the date s howed. Economists have warned t hat t hi ngs c o ul d worsen in rural India because of the reverse migration in the past two weeks, following the lockdown announcement by Prime Minister Narendra Modi.
The global labour body said that employment losses are rising rapidly around the world. “Particularly in low- and middle-income countries, hard-hit sectors have a high proportion of workers in informal employment, and workers with limited access to health services and social protection. Without appropriate policy measures, workers face a high risk of falling into poverty and will experience greater challenges i n regaining their livelihoods during the recovery period,” it said.
ILO has recommended a fourpronged approach, including focused stimulus package, support to enterprises and protection of jobs, in the current crisis time. “Large-scale, integrated, policy measures are needed, focusing on four pillars—supporting enterprises, employment and incomes; stimulating the economy and jobs; protecting workers in the workplace; and, using social dialogue to find solutions,” it said.
(With inputs from PTI)