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Reverse migration is one side of the story. Workers with chronic ailments residing within States can also pose a risk

Labour as a factor of production is a valuable service rendered by a human agent in the production of goods and services. The outcome is generation of wealth and welfare. In common parlance the term labour would cover manual and other kinds of services. Even in this day and age of increased automation in the production process labour remains an important component. In India the labour market basically constitutes the formal (organised) and informal (unorganised) sector. As per the Economic Survey 2019-20 total formal employment in India increased from eight per cent in 2011-12 to 9.98 per cent in 2017-18. Thus the informal sector still provides substantial employment.

The lockdown measures to tame the spread of the virus required businesses to close and the undesired resultant outcome that followed was the laying off of workers – and as a consequence wide-scale reverse migration. Large-scale stoppage of economic activity and the fear of loss of livelihood combined with little or no social protection increased the vulnerability of the labour force especially those employed in the informal sector. Uncertain about their future they were unwillingly forced to flee to their native place. The plight of migrant workers making their reverse migration to their native states has attracted a lot of attention nation-wide exposing their vulnerability. The economic plight of these migrant workers and their vulnerable health conditions are matters of grave concern.

Covid and co-morbidity

The rate at which persons with existing chronic conditions or compromised immune systems have been dying has been observed not only in India but across the world as well. According to the information from the Ministry of Home Affairs 70 per cent of Covid-19 fatalities in India were patients with co-morbid conditions. Several studies have also shown that there is very high correlation of co-morbidity with Covid fatality. One such study is by Jing Yang et al titled “Prevalence of co-morbidities and its effects in patients infected with SARS-CoV-2: a systematic review and meta-analysis” which concluded that underlying disease including hypertension respiratory system disease and cardio vascular disease may be risk factors for severe patients compared with non-severe patients. Taking care of chronic conditions has become critical right now as Covid-19 raises the risk for people with underlying medical issues.

Why the labour class is susceptible

In this context the physical health of the labour force is of prime concern as it affects not only in terms of productivity but also how it plays out in time of pandemics like the current one. To put forth we analysed the data of the 75th Round of the National Sample Survey Organization (NSSO) on “Household Social Consumption: Health 2017-18”. Since this particular NSS survey round referred above does not separately collect information on migrant workers with chronic ailments we cannot specifically comment on its prevalence among them. However there is no denying the fact that migrant workers are always at a disadvantage position either in terms of income shelter and their accessibility and affordability to healthcare facilities which make them more prone to chronic diseases.

The Survey estimated that 3.66 per cent of the total Indian population suffers from some form of chronic ailments. Of this 9.27 per cent is the labour force working in various public and other types of work. Andhra Pradesh (19.11 per cent) West Bengal (17.07 per cent) Kerala (16.42 per cent) Tamil Nadu (12.43 per cent) Maharashtra (7.21 per cent) and Uttar Pradesh (7.16 per cent) are States where chronic ailments are reported by a larger section of the labour work force. These six States along with Punjab Orissa Rajasthan and Madhya Pradesh constituted 91 per cent of the labour work force with chronic ailments. Ironically as per Government data around 70 per cent of the India’s Covid-19 cases have been reported from these ten States. Noteworthy is also the fact that at the all India level almost three-fourths of the labour force with chronic ailments falls in the productive age of 25- 59 years. State-wise in the age group of 25-years the range varies between 63 per cent in Punjab and 88 per cent in Rajasthan of labour force with chronic ailments. Since most of the labour force is engaged in the unorganised and informal sector with little or no social or healthcare protection it becomes all the more vulnerable. 

Figure: Percentage share of labour force with chronic ailment by top ten states

Magnitude of the problem

The wave of reverse migration amid the current pandemic and the fear that they may carry the virus and infect the population in their native state is just one side of the story. Labour force with chronic ailments residing within the States can also pose similar risk in terms of infections and the risk of high fatalities because of their vulnerable health conditions. The challenges posed by the combined effect of reverse migration and wide spread chronic ailments amongst the labour force warrant immediate focus. The option to shield high-risk people by more intensive physical distancing through quarantine measures may be have limited impact.

The question is how will this determine our future public healthcare policy both in the short run and long run? In the present context of the Covid-19 pandemic it becomes all the more critical to understand the significance of its impact. States have their task cut off to not only contain the spread of infection that the incoming native worker might carry but also to tame the infection rate of the labour force within the State.

Till now the general trend have shown that Covid-19 has comparatively affected the urban and semi urban population more on a wider scale than amongst the rural population. Also we know that majority (more than 82 per cent) of the labour work force resides in rural area only. But with the rise in the reverse migration of workers coupled with the nature of the virus being highly contagious the risk of its aggressive spreading in the rural areas should be a matter of concern for the healthcare authorities. This get compounded by the fact that the Government have been easing the lockdown and gradually open more economic activities.

The Covid pandemic and the chronic health conditions of the labour force deserves equal and dedicated attention in terms of public healthcare policy especially in these times when the healthcare systems are already being overwhelmed. The Government would have to delicately balance the critical management of the pandemic considering that a large section of the labour force are chronically ill with the potential of large scale infection and at the same time provide immediate gainful employment. Keeping in mind that approximately 80 percent of the labour force are in the rural areas and the overdependence in the public healthcare facilities which are often inadequate in terms manpower and resources the States would need to have a relook at their strategies. A robust and coordinated policy with special attention to the age group of 25-59 age would be required especially in those States which have a considerable section of their labour force with chronic ailments. We do understand that formulation of a comprehensive and pragmatic healthcare policy is a time consuming process but the need to have one is becoming all the more urgent and critical especially when we are entering ‘Unlock 1.0’.

Palash Baruah is Senior Research Analyst National Council of Applied Economic Research (NCAER) New Delhi and D L Wankhar is a retired Indian Economic Service Officer. Views and opinions expressed are personal

Surveys show that the govt’s support schemes do not reach such households. Direct cash transfers and universal PDS will help

As details of the stimulus package recently announced by Nirmala Sitharaman begin to emerge it appears that there is a serious mismatch between the areas and groups most affected by the Covid-related lockdown and the shape of the subsidies. The people who are most affected by the threats of the disease and income reduction — the urban informal-sector workers — are the least likely to receive the benefits. While movements are being relaxed it is unlikely that red-zone districts particularly those in large metros like Delhi and Mumbai will quickly return to normal.

The uncertain curves of the coronavirus epidemic have translated into even greater uncertainties for those without secure earnings. Most of the nation’s workforce earns its livelihood in a highly diverse informal sector — the underbelly of the economy where a day off essentially means a day without any earnings. This is the population that most needs support in the immediate period creating precarity.

Deepening of insecurities

Data collected by the NCAER National Data Innovation Centre through a scientifically-designed rapid telephone survey of 1756 households conducted between April 3-6 and another survey of 1885 households conducted between April 23-26 help identify the nature of these vulnerabilities. Samples included both urban and rural residents from the Delhi NCR region in three districts of Delhi four districts of Haryana two districts of Rajasthan and three districts of Uttar Pradesh. Results from the Delhi NCR Coronavirus Telephone Surveys (DCVTS) show that the impacts of the lockdown are most intense among families relying on daily wages or those without secured salaried jobs.

The DCVTS households contain a mix of salaried workers (36 per cent in both permanent and casual employment contracts) cultivators (22 per cent) petty business owners (20 per cent) and casual-wage workers (18 per cent). In late April a vast majority (82 per cent) of the households reported some level of reduction in income or wages in the two weeks before the survey with the reduction being the highest for casual-wage workers and small businesses. More than two-thirds (72 per cent) of the casual workers reported that their income and wages had suffered “very much” in this period much higher than regular salaried workers (41 per cent) or farmers (34 per cent).

While most of the respondents supported the lockdown most of the casual workers (63 per cent) were keen to return immediately to seek work once the lockdown restrictions were lifted regardless of the likelihood of contracting disease. This desperation and insecurity aren’t limited to the casual wage-earning workforce but are stark even among those with salaried jobs. Over a third (38 per cent) of the salaried workers — mostly those in the ‘gig economy’ spanning across insecure service sector jobs in e-commerce hotels/restaurants etc — either did not receive any salary received a partial salary or lost their job during the lockdown.

Inadequate relief measures

In the face of dwindling incomes and uncertain livelihoods public relief measures are critical lifelines. Data on relief measures tell a story of a glass half full. The DCVTS-2 findings suggest that 52 per cent of the families in rural areas of the NCR and 42 per cent of those in urban areas received extra rations in the form of grains and pulses. Almost two out of every three households that suffered a major dent in incomes during the lockdown received some form of these additional rations. About 29 per cent households received additional cash transfers from the government during the lockdown.

However nearly half of the poor households in the bottom one-third of the ‘asset ownership index’ did not receive any cash assistance (asset ownership index is similar to the NFHS wealth index based on ownership of vehicles cooking gas toilet indoor water etc). The amount of cash assistance was also modest. In the month before the second survey 50 per cent of the households receiving cash (median) received ₹1000 or less in villages and ₹500 or less in urban areas. Only 19 per cent households received both additional rations and additional cash benefits with large differences between rural (25 per cent) and urban households (12 per cent). More than one-third of the households that had their incomes significantly reduced due to the lockdown needed rations but didn’t receive any. Among urban poor households 46 per cent did not receive additional rations in spite of their need for it. For households having salaried workers who did not receive their full salary for the month of March 38 per cent needed additional rations but did not receive it.

As containment measures focus on infection levels it is clear that metro cities like Delhi almost entirely classified as “red zone” may be the slowest to return to normalcy. Rural areas are a notch better due to combination of less stringent restrictions existing government mechanisms for direct transfer of cash to beneficiaries of programmes such as MGNREGA the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) better coverage of PDS and financial inclusion schemes such as the Jan Dhan Yojana. Thus urban-focussed safety nets may need to be enhanced.

Policy responses

Majority of the DCVTS-2 respondents — especially casual-wage workers and salaried workers who did not receive their full salary — are waiting for the lockdown restrictions to be relaxed. But the switchover to the pre-Covid state is unlikely to be immediate. Given the likelihood of a phased responsive plan for the post-lockdown period targeting relief measures appropriately will be important.

The most immediate and direct source of support required — as the DCVTS-2 findings highlight — is to ensure expanded and effective coverage of relief measures for the most hard-hit families. A major component of this should be cash support amounting to at least 20 days of the usual minimum wage. This can be implemented in districts defined as red zones while movement restrictions are in place. Additionally the PDS needs to be expanded to cover more individuals and items. The recent package includes provision of rations to migrant workers for two months with the national portability of ration cards to be implemented by August. But this does not meet the urgent need of the hour. The time may have come for a simple universal PDS using Aadhaar cards which can be implemented immediately. Expanding PDS to include pulses edible oil dried milk powder and biscuits will increase food security.

In urban areas once the lockdown conditions are relaxed and economic activities resume there will be further need for economic stimuli apart from targeted interventions. These include urban employment guarantee programmes for casual-wage workers whose usual sources of work may not return immediately. Small businesses and home-based enterprises would allow for social distancing while providing livelihoods. Hence they should be extended support under an employment guarantee programme where they can claim some part of the wages paid to their employees.

This would help kickstart the economy. The packages being developed for MSMEs should prioritise micro enterprises where most of the workers are employed. These combination of measures during and following the lockdown would be critical to avoid insecurities.

Sumit Mazumdar is a Research Fellow at the Centre for Health Economics University of York. Santanu Pramanik and Sonalde Desai are at the NCAER National Data Innovation Centre. Views are personal.

If Bihar’s example is anything to go by simply repealing the APMC Act is not enough to benefit farmers. There is a need to move from notional to functional FPOs

In the Covid-19 relief package finance minister Nirmala Sitharaman has focused on a number of capacity building measures for the agriculture sector—such as the Agriculture Infrastructure Fund for strengthening the so-called farm-gate infrastructure including logistics and storage support for perishable farm produce formalisation of micro food enterprises support for marine aquaculture animal husbandry and herbal cultivation and an additional emergency working capital to farmers through NABARD among others. Most of these are part of the recommendations of the DFI committee that have been lying with the finance ministry for quite some time.

The FM also took this opportunity to reform the Agriculture Produce Marketing Committees (APMC) structure and the creation of an enabling legal framework for farmers. The expectation is that reforming/repealing the Act will enhance price realisation for farmers by deregulating select agriculture food stuffs including cereals pulses edible oils oilseeds onions and potato. The formulation of a central law to bring about agriculture marketing reforms is expected to provide marketing flexibility to farmers to sell their product at their chosen market where the price is high. The private investment will flow into the sector for creating capacity in storage etc—this is currently not forthcoming due to the presence of the APMC Act. This is another overdue recommendation of the DFI committee.

While there are fallacies in the APMC Act repealing/reforming it is only a small part of the game. More concrete steps are needed to derive benefits from it. What is certain is that in the present crisis private investment is unlikely to flow for capacity building in agri-infrastructure. It will be at least a year before private investment will flow. More worrying is that private investment may not flow at all and farmers may be worse off if we go by Bihar’s example!

Let me explain. The Bihar government took a bold decision to repeal the APMC Act in 2006. Traders are allowed to purchase agricultural commodities directly from farmers and the market fee is not levied on purchases.

Did these reforms improve price efficiency in the Bihar’s agri-markets? With the abolition of the APMC Act one would expect that the state’s grain markets are integrated within Bihar and also with national markets. Farmers are free to sell to traders in any part of Bihar and elsewhere in the country. This would imply that there is effective price transmission between the grain markets within the state and hence better price is received by farmers. Sadly NCAER’s study Agricultural Diagnostics for the State of Bihar in India indicates that this did not happen till 2019 a span of nearly 13 years.

After the APMC Act was abolished in 2006 it was expected that private investment would take place creating new markets and strengthening facilities in existing ones. On the contrary the situation at the ground level has not improved. Focus group discussions with farmers and traders revealed that agricultural markets are located far away from the villages. It has also been reported that the storage cost in private warehouses is very high and it is difficult for most farmers particularly marginal and small ones to afford it.

Even after the repeal of the APMC Act over 90% of the output of crops including paddy wheat maize lentil gram mustard and banana is sold within the village to traders and commission agents. Farmers reported that they do not get a fair price for their agricultural produce. Most farmers reported that their poor economic conditions and the need for immediate cash after harvest compel them to sell to traders at a lower price. Further government market facilities are not available near the village. Even if farmers take their produce to a distant market yard they face the problem of paying extra (bribes) to commission agents.

Farmers also cannot store produce at their homes due to lack of space and necessary storage conditions—doing so would risk spoilage of grains. Therefore they are forced to sell at the price that traders are willing to offer. Of course the situation is worse in Bihar due to the low level of participation of government agencies in procurement. This situation may be obtained in other states of India too if government procurement activities come to a standstill due to the repeal of the Act.

As such the bargaining power of a farmer is minuscule vis–a-vis a trader’s. To increase their bargaining power the government needs to promote and strengthen farmer producer organisations (FPOs). Group marketing not only reduces the length of marketing channels and marketing costs but also increases farmers’ voice. There is a need to move from the stage of “notional FPOs” to “functional FPOs”.

Contract farming provides a secure market with assured prices for agricultural products. This is important particularly for the growing of perishable products such as vegetables. While the FM has been proactive in reforming the APMC Act she could well have introduced the Model Contract Farming Act. This would have provided a level playing field for both producers and agro-commercial firms.

The author Sanjib Pohit is Professor at the National Council of Applied Economic Research. Views are personal.

• We may have to take recourse to some extraordinary sources to finance the exceptional spending needed to revive growth
• Policymakers have to decide if they want higher growth along with other pain points or a little less growth but also less pain that would have to be borne later on

In my column last month in Mint (Triple Trouble: Coronavirus Hunger And The Economy 17April) I had said that India is grappling with three crises at the same time: a public health crisis caused by the covid-19 pandemic a humanitarian crisis unleashed by the sudden imposition of a nationwide lockdown that revealed little preparation but was more stringent than anywhere in the world and an economic crisis triggered by the shutting down of large segments of the economy.

So far India is clearly winning the public health battle. We have been lucky that the pandemic struck us late. We could learn from the experience of countries that were struck earlier. Strong early action has contained the pace at which the virus has spread giving us some time to ramp up a weak public healthcare system to cope with the pandemic. The number of daily deaths highly volatile and increasing by 18-20% per day in early April started coming down sharply about two weeks after the lockdown was imposed. That increase is now stable at around 5% per day. The ratio of deaths to recoveries is also coming down. The counterfactual of what might have happened in the absence of a strong early lockdown is frightening as we have seen in Italy Spain the US (especially New York) etc. However this battle is being won at a huge humanitarian and economic cost.

On the humanitarian front the picture remains grim. Secure in our affluent or middle-class homes it is difficult for us to imagine the plight of millions of daily wage workers. They have no jobs no income and no food and in the case of migrant workers they have had no means of getting home. What was needed urgently was a generous package of food and income support for whoever sought it and without complicated targeting. Following the ₹20 trillion package announced by Prime Minister Narendra Modi on 12 May finance minister Nirmala Sitharaman announced a component to provide free rations to migrant worker households even without cards and some additional support measures.

Still while government spokespersons wax eloquent on television about the wonderful arrangements in place to shelter and feed unemployed workers and to transport them home these images are juxtaposed against other images of endless lines of men women and even little children with no support whatsoever walking cycling or jostling into crowded trucks desperate to get to their homes hundreds of kilometres away. These surreal contrasts starkly highlight our insensitivity. They tell us that we in our world are quite out of touch with the ground reality of their world.

On the economic front however the outlook is more hopeful now following the PM’s announcement of a huge financial package though it may not be possible to fully implement in one year.

Simulations in the Quarterly Review Of The Economy of the National Council of Applied Economic Research to be launched at a webinar on 15 May indicate that in the absence of a macroeconomic stimulus gross domestic product (GDP) would fall by over 25% in the first quarter of 2020-21 and by about 13% during the whole year. The unemployment rate exceeded 27% at one point according to the Centre for Monitoring Indian Economy something that has never happened before.

An expenditure stimulus of around 5% of GDP over what was budgeted for 2020-21 which many including this columnist have been recommending would turn the recession around to a 3.6% growth. But that would come with double-digit inflation a large fiscal deficit and an unsustainable 3.6% current account deficit. A more modest expenditure stimulus of 3% of GDP would generate a lower but still positive growth of 1.2% but also lower inflation (8.9%) a smaller fiscal deficit (8.8%) and a lower current account deficit (3%). This is the preferred option.

 It turns out that after netting liquidity measures undertaken by the Reserve Bank of India (4% of GDP) the ₹20 trillion cumulative monetary-fiscal stimulus package announced on 12 May would amount to an additional expenditure stimulus of around ₹12 trillion or 6% of GDP including the additional borrowing of ₹5.9 trillion already announced. This is larger than the 5% of GDP stimulus with even larger fiscal and current account deficits and high inflation.

 Details of additional expenditure in the package are still being rolled out. But the harder question is how such a massive borrowing programme would be financed. With the additional borrowing the total borrowing programme of the government (Centre plus states) would amount to over ₹17 trillion. Sovereign lending of this scale is quite unprecedented for our financial system and cannot be managed through any single approach if at all. A combination of channels will be necessary.

 The government should first borrow from commercial banks. Since state governments face a higher cost the Centre could borrow on their behalf. In either case the existing Fiscal Responsibility and Budget Management Act would have to be suspended. However there are limits to this channel. Beyond a point it would push up yields and crowd out the private sector. Second the Reserve Bank’s ways and means advances should be re-purposed and further liberalized with a much larger ceiling and for a longer period (say one year) after which advances can be converted into long-dated securities. Next as the lender of last resort the central bank should directly monetize the residual part of the deficit through private placements as a one-time arrangement. Finally it would be prudent to spread this borrowing over two years 2020-21 and 2021-22 to restore macroeconomic stability.

 Sudipto Mundle is a Distinguished Fellow at the National Council of Applied Economic Research. These are the author’s personal views.

It’s less egalitarian than TV in delivering education. Net-based learning holds promise provided the digital ecosystem improves

The NCAER Skills Report 2018 discussed the immense potential of online learning albeit as complementary to more traditional methods. In the current situation online education is turning out to be a substitute to traditional modes. Is India ready for this switch in terms of its infrastructure and digital readiness of children?

Infrastructure readiness has to be assessed in terms of household assets ownership versus school facilities because of the lockdown that is characterised by social distancing. The National Statistical Organisation (NSO) 75th Round survey on ‘Social Consumption of Education in 2017-18’ had probed households’ ownership of computers and access to the internet.

The computer was a catch-all for devices like desktop laptop notebook netbook palmtop tablet (or similar hand-held devices). Specifically the smartphone was not included in this list. Further the survey probed if a household member of age five years and above had used internet to find evaluate and communicate information from any location during the last 30 days preceding the date of survey via any of the above-mentioned devices and smartphone etc.

The analysis only includes households which had students aged between 5-29 years and were currently enrolled and attending school. The survey showed that 8.3 per cent of households had computers and 21.6 per cent had internet facility. Further a larger share of households had access to internet facility versus ownership of computers. However there are large variations between rural and urban areas and intra-regional gaps as well. In urban areas 20 per cent of households had computers and 39.8 per cent had access to internet (see Table). The corresponding numbers in rural areas were 4 per cent and 15 per cent respectively. In the top two urban quintiles 68.3 per cent and 50 per cent of households had internet access respectively. This number was 18 per cent in the bottom-most urban quintile. Twenty-nine per cent of households had internet access in the top-most rural quintile and 5.7 per cent in the bottom-most quintile.

Digital skills

The Indian youth are also characterised by limited digital skills. Only 17.6 per cent of the youth could use a computer and 18.4 per cent could access internet. As per the NSO (2019) the ability to use of computer could include any of the following tasks — copying or moving a file or folder using copy and paste tools to duplicate or move information within a document sending e-mails with attached files (example document picture and video) using basic arithmetic formulae in a spreadsheet connecting and installing new devices (example modem camera printer) finding downloading installing and configuring software creating electronic presentations with presentation software (including text images sound video or charts) transferring files between a computer and other devices writing a computer program using a specialised programming language.

The ability to use internet meant that the household member was able to use internet browser for website navigation using e-mail and social networking applications etc. to find evaluate and communicate information. Therefore relatively speaking only the top most urban quintiles in India are the most ready for online education. State/UT education policy during the lockdown needs a more egalitarian means of delivering education. One alternative to online education is delivery of education via television.

The Delhi Government is ahead of the curve in thinking about it. The National Family Health Survey 2015-16 shows that 86 per cent of urban households and 51.5 per cent of rural households had colour television. In the short-run the television holds a much more viable equitable cost-efficient and scalable alternative than online education.

A caveat remains that is how will children be assessed on their understanding of these lessons? Help or parental guidance at home especially in bottom quintiles may also be limited. Private tuitions are also not currently available.

The current crisis has acted as a fillip to encourage digital education. However to achieve its potential in the medium run Indian schools need to be better equipped digitally which in turn needs to be measured appropriately by various statistical agencies. There is on-going research in NCAER to construct education satellite accounts for two States. These tools may be potentially used to analyse the contribution of digital education.

Students need to learn digital skills for its own sake and improving quality of education. The emphasis on online education has to be accompanied with changes in curriculum textbooks teacher training examination systems and pedagogy. Last but not the least quality of traditional education has to be improved too.

Bornali Bhandari is a Senior Fellow; Charu Jain an Associate Fellow; and Ajaya Sahu a Senior Research Analyst at the National Council of Applied Economic Research. Views are personal.