Covid & Economic Slowdown: Needed a national relief and recovery package for the labouring poor

(Call for a National Relief and Recovery Package: If Not Now, When? released on June 14, 2021)

The impact of the two COVID waves and attendant lockdowns on Indian households and workers cannot be overstated. Even before the devastating second wave, several sources suggest that millions of households became poor, reversing hard-fought gains in poverty reduction. More than half of the informal workforce lost work and incomes, and over two-thirds experienced increased hunger (see Annexure 2 in this note). Poorer households have borne the brunt of the impact and inequality has, without doubt, worsened and deepened. The ongoing second wave and localised restrictions have not only exacerbated the shocks of 2020 for the urban poor and migrant workers but have also made rural households and non-poor households newly and deeply vulnerable. Women, children, and socially disadvantaged groups, in particular, are at a higher risk of falling behind over the longer term.  Unless bold steps are taken, these effects may be long-lasting.

Even prior to the pandemic, the Indian economy had experienced several quarters of economic slowdown resulting in high unemployment and wage stagnation. The income shock of the pandemic has further depressed aggregate demand. Beyond the necessary focus on vaccination and health systems, therefore, a rapid macroeconomic recovery requires an urgent response in the form of a National Relief and Recovery Package to: (a) protect life, (b) partially compensate for lost livelihoods and income, and (c) boost demand in the economy for faster overall recovery. Without the direct support of such a Package, simply unlocking the economy will not lead to a balanced recovery. Advanced and developing economies across the world are investing in similar state-led recovery programmes that seek to boost household income and spending, recognizing the need for large scale relief and recovery interventions into the economy. India must do the same.

This statement focuses on three minimum and necessary elements of this package: food, income, and work. The near-universal impact of the second wave means that we focus on a larger set of vulnerable households beyond, for e.g., just those included under the National Food Security Act (NFSA). The Package must thus cover 33cr households in all which is about 80% of all rural households and 70% of urban households in the country (see Annexure 1 in this note). Building on and expanding the 2020 national relief package, we detail key components in the table below while also suggesting additional measures on loans and credit in Annexure 1.

Clear delivery mechanisms exist with precedence for recommendations on Food and Work, with known and accepted fiscal allocations. For Income, the proposed crisis cash transfer must leverage existing direct benefit transfer systems (NREGA, PM-KISAN, PMJDY, NSAP) with new decentralized systems of direct distribution from ration shops, post offices, panchayats and other local institutions. We anticipate, as detailed in Annexure 1 in this note, that the proposed income transfer will cost the Government of India an additional Rs 5.5 lakh crore, or 2.45% of the projected 2021-22 GDP. The Centre must lead in this package, with minimal cost-sharing with states who focus on delivery and use their own funds to expand the reach of the package, particularly in urban areas.

It is essential that the Government of India recognize the need for directed, equitable and dignified economic recovery for India’s workers and citizens. We urge it to act urgently, following its constitutional obligations as well as global best practice. If not now when?

Endorsements:

1. Aajeevika Bureau
2. All India Central Council of Trade Unions (AICCTU)
3. Andhra Pradesh Domestic Workers Federation
4. Andhra Pradesh Vyavsaya Vruthidarula Union (APVVU)
5. Asangathit Kaamgaar Adhikar Manch
6. Assam Mazdoor Union
7. Association of Rural Education and Development Service (AREDS)
8. Bandhua Mukti Morcha
9. Bhartiya Kamgaar Sena
10. Centre for Amenities, Rehabilitation and Education (CARE)
11. Centre for Financial Accountability
12. Centre for Labor Research and Action
13. Chetna Andolan, Uttarakhand
14. Cord India
15. Dagadkhan mazdoor kalyan parishad
16. Dakshinbanga Matsyajibi Forum (DMF)
17. Dalit Bahujan Resource Centre
18. Dalit Media Watch
19. Delhi Shramik Sangathan
20. FIRA- Federation of Indian Rationalist Association
21. Ghar Bachao Ghar Banao Andolan
22. Gram Vaani
23. Grameena Koolikaarmikara Sanghatane (GRAKOOS)
24. Habitat and Livelihood Welfare Association
25. Hamal Panchayat
26. HASIRUDALA
27. Hawkers Joint Action Committee
28. Indian Federation of App based Transport workers (IFAT)
29. Indian Labour Union (ILU)
30. Indian Federation of Trade Unions (IFTU)
31. Jan Chetna Sansthan
32. Jan Jagriti Shakti Sangathan
33. Jan Swasthya Abhiyan, Mumbai
34. Kaamgaar Ekta Union
35. LibTech India
36. Maharashtra Kashtakari Sangharsh Mahasangh
37. MANS- Maha ANiS- Maharashtra Andhashraddha Nirmulan Samity.
38. Mazdoor Kisan Shakti Sangathan
39. Meghalaya & Greater Shillong Progressive Hawkers & Street Vendors Association
40. Nari Atyachar Virodhi Manch (Forum Against Oppression of Women), Mumbai
41. National Alliance of People’s Movements (NAPM)
42. National Campaign Committee on Central legislation of construction workers
43. National Centre for Advocacy Studies
44. National Centre for Labour
45. National Confederation of Dalit and Adivasi Organisations (NACDAOR)
46. National Fish Workers Forum
47. National Hawkers Federation
48. National Platform for Small Scale Fish Workers (NPSSFW)
49. National Workers Movement
50. PAIGAM Network (People’s Association in Grassroots Action and Movements)
51. Partnering Hope into Action Foundation (PHIA)
52. Prayas Centre for Labor Research and Action
53. RAIOT Collective, Meghalaya
54. Rajasthan Gharelu Mahila Kaamgaar Union
55. Recyclers association
56. Right to Food Campaign India
57. Rural Uplift Centre
58. Rythu Swarajya Vedika
59. Sarvahara Jan Andolan
60. Shramik Adhikar Manch
61. Social Accountability Forum for Action and Research (SAFAR)
62. Telangana Domestic workers union
63. Thma U Rangli-Juki (TUR)
64. Tirupur Peoples Forum
65. Trade Union Centre of India (TUCI)
66. United Nurses Association
67. Vaan Muhill
68. Workers Power of Meghalaya, Meghalaya
69. Youth for Unity and Voluntary Action (YUVA)
70. YUGANTAR

For more details:

Working Peoples’ Charter Network - Email: workerscharterprocess[a]gmail.com