MORE than one and a half years after the outbreak of COVID-19 in India, the Central government is yet to come up with an estimate of how badly livelihoods, incomes and jobs were affected by the pandemic and successive lockdowns. With the bulk of the labour force remaining in the unorganised sector, the exodus of migrants from cities to the villages during the prolonged lockdown in 2020 was but a microcosm of the scale of the economic displacement that had taken place.
Most governments the world over have acknowledged that the pandemic led to an unprecedented loss of jobs, but there has been little official assessment of the same in India. The government announced several schemes and programmes to mitigate the economic distress caused by the pandemic, but their effectiveness has been patchy at best.
The Parliamentary Standing Committee on Labour, which inquired into the impact of the pandemic—the first and second waves—as well as the impact of the government schemes launched to address the crisis, tabled its report in Parliament in early August. It castigated the government for its inability to furnish sufficient information on either the extent of the job losses or the effectiveness of its schemes and programmes.
Absence of official data
The committee asked the Ministry of Labour what the unemployment rate was, as of May 31, 2021, but did not get any satisfactory answer. It also found that there was no national database of unorganised sector workers and that the government did not have data on the number of workers who had died of COVID. The government had not launched any scheme to provide employment to their wards either. It had neither conducted any assessment of the impact of the Labour Ministry’s advisories to establishments to not terminate employees, nor did it have data on migrant workers who had been re-employed.
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The committee came down heavily on the dispensation, stating that neither the Central government nor the State governments and Union Territory administrations were doing people in distress any favour by providing welfare measures, as they were duty-bound to do so.
It termed as “deplorable” the Labour Ministry’s inability to furnish information on provision of jobs to family members of those who died in the pandemic. Also, it described as “worrisome” the Ministry’s statement that there was no guideline or scheme that made it mandatory for an employer to provide employment to them. The panel said that the government should frame guidelines in this regard.
The committee urged the government and its arms, especially Employees’ State Insurance Corporation (ESIC) and the Employees’ Provident Fund Organisation (EPFO), to “go beyond guidelines/schemes” and adopt a humane approach and compassionate attitude at this critical juncture to assist aggrieved workers and ensure timely relief to them. It said that another round of income support was needed to compensate for the loss of jobs during the lockdowns.
Job losses
The committee criticised the government for failing to arrive at an estimate of the jobs lost in the organised and unorganised sectors. It noted that while no survey data were available on the impact of the second wave, there was anecdotal evidence to suggest that significant income losses had taken place during the first wave, especially in the informal sector, pushing the vulnerable sections of society deeper into crisis.
The only estimate of unemployment came from the Centre for the Monitoring of the Indian Economy (CMIE), a private organisation, which said that the rate of unemployment had risen from 8.75 per cent in March 2020 to 23.52 per cent in April 2020.
The Ministry told the panel that data on unemployment and job losses owing to the pandemic would be available only after the Ministry of Statistics and Implementation (MOSPI) completed its Periodic Labour Force Survey (PLFS) for 2019-20 and 2020-21.
The committee said that it was “not convinced with the reasonings adduced by the Ministry for such an inordinate delay for the publication of the PLFS reports, especially when it becomes imperative to gauge the nature of unemployment in the country due to COVID.”
The government told the panel that the Labour Ministry’s Labour Bureau had discontinued the Annual Employment-Unemployment Survey since 2016-17. However, the quarterly PLFS bulletin from the MOSPI on urban unemployment pegged the unemployment rate at an all-time high of 20.8 per cent for the April-June 2020 period. (In comparison, the rate was 8.9 per cent in the same period in 2019.) The Statewise unemployment rates in the April-June 2020 period were all in double digits, indicating the extent of the crisis.
The PLFS annual reports show that the all-India unemployment rates in previous years were much lower: 6 per cent in 2017-18 and 5.8 per cent in 2018-19.
The committee noted that the informal sector workers, comprising migrants, domestic workers, gig and building construction workers, casual contract workers and self-employed persons such as painters, plumbers, carpenters, and street vendors, were the worst affected by the pandemic and lockdowns. This was mainly owing to the seasonality of employment and the lack of formal employer-employee relationships.
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Observing that the pandemic had cast a “long shadow” on these workers and their families, the Committee recommended that apart from social security measures, the government must explore ways to put money into the bank accounts of these informal sector workers during “adverse conditions like COVID-19”. The pandemic, the committee noted, had come against the backdrop of high and rising unemployment. Therefore, a “comprehensive roadmap” was required to address the widening disparities in the job market in the organised sector as well as the “deteriorating condition of employment aggravated by the pandemic”, it said.
In a bid to underplay the extent of the unemployment crisis, the Labour Ministry told the committee that the decline in the number of EPFO subscribers had come down by 87,821 and that there was a net increase of 13.73 per cent in subscribers in April 2021. But it did not share details about the sectorwise increase of EPFO subscribers.
On employment generation in the unorganised sector, the Ministry said it had “no area framed for this data for the unorganised sector”. It added that the area frame survey had begun and that the all-India quarterly employment generation survey spanning all sectors would be available in April 2022. (An area frame is a collection of well-defined units used to draw survey samples.) The Ministry told the panel: “It would cover the entire universe.” Clearly, the government did not have any idea of the extent of employment losses, especially in the unorganised sector.
The Ministry also informed the committee that data from the media and non-government sectors were not authentic or reliable. A Ministry representative said that the Ministry had set up an expert committee which had held as many as 73 sittings through videoconferencing and “personal” meetings with expert groups. Yet, the representative said:“I am very sure that data with regard to employment and unemployment figures both in organised and unorganised sectors was lacking.” There was simply no data available.
Impact assessment of advisories
In 2020, the Labour Ministry sent advisories to State governments and Union Territories to advise employers in the private/public establishments to extend their “co-ordination by not terminating their employees, particularly casual or contractual workers, from jobs or reduce their wages”.
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Asked whether the Ministry did an impact assessment of the advisories, the Ministry representative stated that no such study had been done. The committee said that “without assessing the impact, mere issuing of advisories would serve no purpose”, as could be seen from the fact that some employers had reportedly challenged the advisories in the Supreme Court and the matter was sub judice. It added that the Ministry needed to carry out “periodic evaluation studies” with State governments to assess the extent of adherence to the advisories and ensure that aberrations were promptly corrected for the benefit of aggrieved employees and workers.
On PF contributions
On May 13, 2020, the government slashed the statutory provident fund contribution rate from 12 per cent to 10 per cent for all establishments, barring those owned or controlled by the Central government, as part of efforts to address the liquidity crunch in the country.
To reduce the burden of wages and encourage employment generation, the government said that under the Atmanirbhar Bharat Rozgar Yojana (ABRY), it would bear the employers’ and employees’ share of PF contribution for two years for new employees. This was applicable EPFO-covered establishments and entities in select sectors, including micro, small and medium enterprises (MSMEs). The government claimed that 74,875 establishments and 19,63,594 persons had benefited from the ABRY. But then, there were 419 million workers in the informal sector who did not benefit from this largesse.
According to CMIE data, nearly half of all salaried workers had moved into informal employment in 2020. It estimated that 230 million people were now earning less than the national minimum wage. In December 2020, 20 per cent of the workers who had lost their jobs during the lockdown remained unemployed.
The government claimed that under the PM Street Vendor’s AtmaNirbhar Nidhi micro-credit scheme, it had accepted 25,03,919 lakh applications and made disbursements to 21,57,614 beneficiaries as of June 28, 2021. It had received a total of 42,44,862 applications. In any event, these are loans that applicants will have to repay. The committee suggested to the Ministry that instead of extending loans, the government should make direct cash grants to the affected persons, which would enable them to restart income-generating activity and benefit them more.
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The largest number of beneficiaries hailed from Uttar Pradesh, followed by Telangana, Madhya Pradesh, Maharashtra, Andhra Pradesh, Karnataka and Gujarat. There are an estimated 50-60 lakh street vendors in the country and clearly, many had not benefited from the scheme.
It may be recalled that the government had not bothered to collect details of migrant workers from the States and Union Territories, and began doing so only after the Supreme Court intervened in June 2020.
In this regard, the government informed the committee that 1,14,30,968 migrant workers had returned to their home States during the first wave. In the second wave, some 5,15,363 workers reportedly returned home for crop cutting and attending marriages and festivals, according to the Ministry. However, the Ministry did not have data on how many migrant workers had been re-employed after returning to their workplaces. It told the committee: “Migration of workers from one State to another State is a continuous process and the migrant workers keep on moving from one State to other States in search of work. Therefore, it is not feasible to keep such data.”
Asked about co-ordination between the States and the Central government to ensure the all-round welfare of migrant workers, the Ministry replied that it had issued advisory guidelines to the States in this regard. However, there is no information on whether the guidelines were complied with.
As for cash relief to building and other construction workers in the second wave, only seven out of 36 States and Union Territories had disbursed amounts ranging from Rs.1,000 to Rs.5,000 and that too to a tiny fraction of such workers in their States.
Again, the Central government had issued advisories to the States and Union Territories directing them to provide financial assistance to the workers by direct benefit transfer of the cess collected by them. Compared to more than 1.82 crore workers who received the benefits from State governments in the first wave, only about 1.18 crore workers benefited in the second wave, which was more devastating, and that too only in a handful of States. The Centre’s contribution was confined to issuing advisories.
Database for unorganised workers
The Ministry told the committee it was working on creating a National Database for Unorganised Sector Workers and would launch it by August 15. In fact, it was the Supreme Court that had directed the government to launch a portal by the end of July to create this database. Registration on the portal was voluntary and entitled workers to accident insurance cover but nothing else.
The committee expressed surprise that the Labour Ministry waited for “as long as two months”, until June 2020, to write to State governments and “that too, after goaded by the Supreme Court, to collect the much needed detailed data of the migrant workers”. This, the committee observed, “spoke volumes of the inaction/delayed action” on the part of the Ministry and urged it to take suo motu cognisance of such an “unprecedented crisis” without waiting for the judiciary to intervene.
It added: “It is unacceptable that the all-important exercise of developing a comprehensive national database for the unorganised workers continues to be a work in progress.”
The Ministry also did not have data on the number of such workers who had died in the pandemic. It said it received a total of 417 claims from eligible dependents of deceased ESI beneficiaries who would receive “periodical payment in their bank account”.
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The Health Ministry, it further stated, did not maintain a separate classification of workers who had died of COVID-19. A total of 4,04,211 persons had died as of July 7, 2021. But the number of deceased persons had also gone up since then. As of August 20, 2021, a total of 4,33,589 persons had died of COVID. The Labour Ministry was unable to furnish information on the deployment of family members of those workers and labourers who had died in the pandemic.
Sunil Barthwal, Chief Provident Fund Commissioner, clarified to the panel that there was no scheme or guideline to provide employment to wards of those had died of COVID.
Considering that so many earning members had lost their lives, leaving families in debt and destitution, it was shocking that the government did not deem it necessary to provide employment or even explore the idea of providing such employment to eligible wards of the deceased.
The committee also questioned the EPF payroll additions in 2021 claimed by the government and suggested that it should be reconciled with studies that showed salaried workers moving into informal work either as self-employed, casual, informal salaried jobs between late 2019 and late 2020. The reconciliation was important to get an accurate picture of the unemployment crisis. The committee cited a study by Azim Premji University which found that half of all formal salaried workers had shifted to informal forms of employment between late 2019 and late 2020.
The government has massively underplayed the scale of the economic distress caused by the pandemic. Almost 4.5 lakh people have succumbed to COVID and people from the poor sections have been the worst affected by the pandemic. With no data at hand as to how many among the working poor died and how many lost their livelihood, the government’s schemes and welfare measures are not likely to benefit the vast majority of people who need timely succour.
