The lockdown from March 24-May 3 is now on its last stages. Its effects have been severely felt because the production, consumption, exchange and other interdependent economic activities have crippled industry at the national level and within the States. Losses of employment and income have severely impacted the workers in the informal (including unorganised) sectors and poorer civilians who are unprotected by statutory social security measures. Livelihood has been the critical issue for them as well as their dependents, especially if they are migrants or homeless. Thus, provision of livelihood security comprising income and food security had been the biggest national challenge that Government of India and State governments have to jointly cope with during the lockdown.

As per the latest annual Periodic Labour Force Survey of the Government of India, the total size of informal workers comprising the self-employed and causal labourers is 356.7 million or about 76 per cent of total number of workers in India. Informal workers are heterogeneous and work in the primary, secondary and tertiary sectors and occupations.

Workers’ welfare board

For instance, building and other construction workers (BOCW) in the construction sector mainly comprise the casual labourers. About 40 million of total informal workers in India are BOCW, and Karnataka’s share is about 7 per cent. What are the efforts undertaken by Karnataka to wipe out their tears by protecting and constructing their livelihood under lockdown? Do they have lessons for other States in India?

As a follow up of the Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996, the State government had formulated rules for establishment and working of the Karnataka Building and Other Construction Workers Welfare Board in January 2007. The Board has introduced a wide range of welfare schemes, including an old-age pension scheme, disability pension, maternity benefits, assistance for purchase of (tools) instruments, purchase or construction of a house, funeral expenses, education for workers’ children, medical expenses (in-patient cases), accidental death or permanent displacement (incapacitation), medical expenses for treatment of major ailments and marriage expenses.

Most recently, assistance for LPG connection, free bus pass for the Bangalore Metropolitan Transport Corporation and Karnataka State Road Transport Corporation buses, and assistance to pre-school education and nutritional support for children have been introduced.

In essence, the welfare benefits are most generous and cover the workers throughout various life stages. Most importantly, the benefits are limited to registered and eligible workers above 18 years (about 16 lakh) with equal opportunity to avail the benefits of all welfare schemes. Registration, however, is voluntary and a large number of BOCW are yet to register (estimated over 12 lakh).

Means of support

In principle, expenditure on the welfare schemes for BOCW should be financed by 1 per cent cess collection on the value of construction activities (excluding the value of land). Today, the size of the fund exceeds ₹5,527 crore but its utilisation rate has remained less than 10 per cent. Assistance for education, weddings and funerals occupies the top positions in utilisation. Consequently, over the years, a huge amount of money had been accumulated in the welfare fund by ways of unspent cess collections, interest income on bank deposits and membership and renewal fees. The Board does not face any budget constraints with regard to increasing the existing benefits and introducing new schemes.

Thus, Government of Karnataka has directed the Board to use the Welfare Fund to provide a livelihood allowance of ₹1,000 per month per registered worker and arrange temporary boarding and lodging facilities to the needy (currently, about 1.40 lakh) migrant workers (including unorganised non-BOCW). Inter-district migrants are being allowed and facilitated to return to their villages at public cost.

These experiences of Karnataka show the flexibility in spending from the welfare fund in times of emergencies like the lockdown. In the future, this flexibility should be permanently built-in and automatic, in lieu of having to resort to time-consuming amendments to existing rules. Further, there is a strong need to extend the welfare benefits to the currently unregistered BOCW. Certainly, this is not a time to force the hapless workers to register to avail the welfare benefits.

Moreover, the above livelihood support measures to BOCW by the Board is supplemented by the State government’s general poverty alleviation through food security programmes for poor civilians’ and informal workers’ families (including BOCW), such as, daily free distribution of 8.84 lakh litres of milk (half a litre per person) and strengthening public distribution system through increased quantity and advanced release of foodgrains for holders of about 1.16 crore BPL cards, 20.53 lakh APL cards and 10.93 lakh Antyodaya cards.

In addition, wage and employment are ensured by increase in daily wages per worker from ₹249 to ₹275 for 62.31 lakh job-card holders under NAREGA; and instructing the public and private sector institutions not to terminate their employees, especially casual and contractual workers, or reduce their wages. In addition, there are silent relief works by non-governmental groups although their coverage and scale of operation are obscure.

Getting back on track

With falling revenues for the governments, budgetary support to the livelihood security for millions of non-BOCW on a daily basis and for a long period is unmanageable with good governance. For instance, for the State and local governments, identification of eligible beneficiaries with no inclusion or exclusion errors is a formidable task ,and delivery of services to thousands of people at their places of living is practically challenging without violation of social distance norms and other Covid-19 health regulations.

It is time for the State government to explore a livelihood security measure based on a direct cash transfer than in-kind transfers with a complete list of eligible persons’ registry. This registry should be independent of registration status of persons in different occupations. Further, this is the right time to bring back a policy initiative for a Universal Basic Income in India for consideration on a priority basis.

In recognition of the plight of all informal workers in general, and BOCW in particular, the lockdown guidelines given by the Government of India on April 15 and the Government of Karnataka on April 23 have allowed for resumption of activities which largely comprise informal sector workers such as street vendors of fruits and vegetables, repair services, transport vehicles, housing and construction activities.

These guidelines are being modified to relax more income and employment generation economic activities after May 3. As far as BOCW are concerned, the resumption of construction activities in both rural and urban areas is most welcome. In urban areas, however, continuation of work is allowed wherever workers are available on site. This is to stop their reverse migration from rural areas, encourage them to return to work and continue with their wage income generation activities.

The success of these relaxations for BOCW depends on how many of the 1.40 lakh or more workers, who are currently sheltered with shelter camps in Karnataka, can return to their works soon at their construction sites. In the meantime, all livelihood protection measures under implementation must be continued to all workers for at least three months from May 3, in order to offset the transition cost for them.

The writer is with the Fiscal Policy Institute, Bengaluru. Views are personal

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