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.