Urban poor. Falling between the cracks

Just how badly has the deadly second wave of the SARS-COV2 pandemic hit the economy? The latest reports suggest that the impact may be far worse than the battering that the West coast received from Cyclone Tauktae and the East coast is currently getting from Cyclone Yaas.

According to an estimate by State Bank of India, the loss in the first quarter of the ongoing fiscal — the second wave’s surge more or less coincided with the start of the new financial year — alone may be of the order of ₹6 lakh crore.

An estimate by Barclays Bank puts the daily loss induced by staggered lockdowns of varying severity across different States, as well as the night curfew clamped in many large urban centres, at around $1.2 billion, or more than ₹8,723 crore a day.

Barclays noted that all high frequency indicators like energy consumption (fuel and electricity), mobility indicators, GST e-way bills etc are back at levels last seen in May-June of 2020, when India was still reeling under one of the world’s harshest lockdowns. Cutting the growth estimate back to single digits for the quarter, the Barclays report noted that the second wave had hit the affluent urban consumer particularly hard, with a knock-on effect on consumption.

These research reports, of course, were primarily meant for their clients, who in turn are looking at these metrics from an investments point of view. However, the very fact that the second wave has managed to shatter the last bastion in India — the wall between the haves and have-nots — has also meant that the debate has shifted focus on to issues which impact the former.

A hit for the ‘haves’

The real status of the healthcare sector in India became visible to India’s rich, powerful as well the legions of the comfortable (you and me, in other words) discovered that money, connections, influence, exclusivity of one’s residence — nothing helped to either escape the virus, or access an overburdened system for succour when afflicted. If there were no hospital beds, or no oxygen in the hospitals, the rich died as surely as the poor.

But there is one segment of urban society which has been even harder hit by the pandemic, but one which has, for long, failed to attract either policy attention or the fancy of the chattering (and twittering) classes. I refer to the urban poor, who have always been second class citizens even amongst India’s oceans of poor when it comes to policy support, and who have, when the pandemic hit, once again fallen noiselessly through the cracks.

Just how badly have they been hit? When the pandemic struck last year, and lockdowns threw millions of Indians working in urban India out of work, more than an estimated 1.4 crore migrant workers walked to the only place where they could be assured of some sanctuary — their homes.

This time around the exodus has not been as severe — or as visible. Nevertheless, an estimated 23 crore people were pushed into poverty by the pandemic, according to a study (‘State of Working India 2021 – One year of Covid-19’) brought out by the Centre for Sustainable Employment, Azim Premji University.

The report pointed out that nearly half the salaried class was forced to shift to more informal work, more women lost jobs than men, and poorer households not only experienced higher income losses but were thrust deeper into debt by illness and job loss. And this was just the impact of the first wave. As of September-October 2020 (the time period when the study was conducted), one in five informal workers who had lost their jobs or livelihoods in the first lockdown was still out of work.

Crippling job losses

Cut to April 2021, and the surge of the second wave. According to an estimate by CMIE, a staggering 7.5 million people lost their jobs in the month of April alone. The national unemployment rate soared to almost 8 per cent as compared to 6.5 per cent in March, with urban unemployment at 9.78 per cent, that is close to one in 10 urban workers being unemployed. For the week ending May 23, according to CMIE data, urban unemployment has shot up to 17.41 per cent.

Even this may be an underestimate. While the employed/unemployed status does not capture disguised unemployment, underemployment or poor quality jobs, there has been a steady decline in the number of the working age population that is neither unemployed nor looking for work — in other words, it is simply not participating in the workforce because the jobs are not there.

Rural employment has been more resilient. In fact the reverse migration of workers from urban to rural areas takes place precisely for this reason — recent migrants know that they may have shelter, emergency programmes like MNREGA to fall back on, and more importantly, access to food and healthcare support (PDS rations, free healthcare) denied to them for domicile reasons in their places of work.

India has done commendable work in poverty alleviation and mitigation — MNREGA and the midday meal scheme are just two examples — but almost all of this has been focussed on rural areas. This also holds true for global bilateral and multilateral aid and assistance for poverty alleviation, which has also been largely rural centric.

The urban poor miss the bus because they are invisible — they are often missing from electoral rolls in cities, or have identity papers placing them elsewhere; non portability of ration cards falsely distorts the need for assistance, and there are no job guarantee schemes like MNREGA.

Further, the imperfect economic devolution of finances from Centre to State to local self governments makes the situation worse. Even in the national capital city state of Delhi, with one of the highest per capita GDP and incomes in the country, the municipalities are struggling to maintain even basic services and pay salaries — leave alone sparing money for the informal urban poor, who in any case cannot produce papers to prove that they exist there and are therefore officially someone’s headache.

If there is one learning from Covid, it is this — India already has a bigger problem of vulnerable urban poor than it realises. This is the segment which is hardest hit by any downturn, and the fastest to slip back into poverty. Unless we sort out or bureaucratic bottlenecks which prevent even the meagre resources being allocated towards them from actually reaching the beneficiaries, we will have a bigger crisis than the pandemic.

And it is more than high time the Centre started putting urban poverty alleviation at the centre-stage of policy. Creating an empowered ministry (and not a half-ministry as at present) will be a start.

The writer is former Editor of BusinessLine

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