COVID-19 results in a staggering 77 percent increase in poor households

Livelihoods: A study by Azim Premji University estimates that the first wave of the pandemic pushed the daily earnings of 23 crore Indian families below INR 375—the minimum mandated daily wage suggested by a government committee.

The study titled ‘State of Working India 2021: One year of COVID-19‘ reveals that the number of people living in households with daily incomes below INR 375 was 22.62 crore and 7.24 crore in rural and urban areas respectively at the start of the pandemic in March 2020. By the end of October 2020, these numbers had increased to 36.52 crores in rural areas and 16.38 crores in urban areas. Put together, the numbers saw a 77 percent rise from 29.86 to 52.9 crores.

“This amounts to an increase in the poverty rate by 15 percentage points in rural areas and nearly 20 percentage points in urban areas. Had the pandemic not occurred, poverty would have declined by 5 percentage points in rural areas and 1.5 percentage points in urban areas between 2019 and 2020, and 50 million would have been lifted above this line,” the report added.

In 2019, an expert committee appointed by the government to determine a national minimum wage had proposed an amount of INR 375 per day. This was based on estimated expenses for a family after factoring in a minimum recommended food intake, clothing, fuel, rent, education, medicines, footwear, and transport for wage earners and their families.

The report found that nearly half of formal salaried workers moved into informal work, either as self-employed (30 percent), casual wage (10 percent), or informal salaried workers (9 percent).

The study recommends that to ease the hardships suffered by low-income families during the pandemic, the government should use the public distribution system instead of the Jan Dhan Yojana since the reach of the former is larger, enable a cash transfer of INR 5,000 for three months to vulnerable households, expand NREGA entitlements to 150 days, provide a COVID-19 hardship allowance of INR 30,000 to 2.5 million Anganwadi and ASHA workers, and pilot an urban employment programme with a focus on women workers.

The above measures will amount to approximately INR 5.5 lakh crore of additional spending.

Read this article to understand why it might be time to implement an urban NREGA.

Fundraising & Communications: The Ministry of Home Affairs (MHA) has issued a circular extending the validity of FCRA registration certificates to September 30th, 2021. This applies to all FCRA licences that have expired or will expire between September 29th, 2020 and May 31st, 2021. The decision to extend the deadline has been driven by the exigencies arising from the COVID-19 situation.

FCRA refers to the Foreign Contribution (Regulation) Act 2010, which permits charitable organisations based in India to raise funds from foreign sources.

The order also clarified that nonprofits that have already opened an account and have the requisite permission to receive foreign aid, can henceforth receive it only in these newly-opened accounts.

The FCRA law was amended in September 2020 to include a clause that mandated that all nonprofits receiving foreign aid must necessarily open an account in State Bank of India’s New Delhi Main Branch. The government had initially set the deadline for this account opening as March 31st, 2021; it later extended it to June 30th, 2021 after several nonprofits argued in court that there had been delays because necessary approvals from MHA had not been received.

Several organisations have not been able to receive foreign funds during the crisis caused by the second wave, and this has impacted their COVID-19 relief efforts. Relaxing the foreign funding rules could significantly help organisations ramp up their operations to help individuals, supply critical healthcare equipment, and respond to communities in rural areas.

Read this article to know how amending the FCRA can have unforeseen implications.

Philanthropy & CSR: The Ministry of Corporate Affairs (MCA) has issued a circular that allows corporate spending on health infrastructure for COVID-19 care to qualify as corporate social responsibility (CSR) expenditure.

This includes setting up medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment to counter COVID-19.  

The announcement comes at a time when all efforts are being directed towards expediting efforts to support the country’s healthcare infrastructure.

According to the circular, companies can now undertake projects and activities in collaboration with other companies using CSR funds. Additionally, they can contribute to specified research and development projects, as well as publicly funded universities and certain organisations that conduct research in science, technology, engineering, and medicine.

The government had earlier clarified that setting up makeshift hospitals and temporary COVID-19 care facilities would also be considered a CSR activity. Rajesh Verma, the Corporate Affairs Secretary, has requested businesses to consider converting vacant office buildings into COVID-19 facilities to cater to the rapidly increasing caseload.

Read this article to understand why media attention on COVID-19 deaths due to lack of oxygen in big cities has skewed donor priorities.