Income Support Through Cash Transfers and Employment Guarantee Schemes During the Pandemic Times in India
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Income Support Through Cash Transfers and Employment Guarantee Schemes During the Pandemic Times in India S. Mahendra Dev1 Published online: 11 October 2020 © Indian Society of Labour Economics 2020
1 Introduction Responding to the shocks and vulnerabilities of the poor and marginalized through social policy has been one of the major functions of the governments all over the world. Policies related to social protection assume importance in this context, as they would directly deliver support to the needy. An important justification for public interventions in social protection programmes has been an improvement in the welfare of the poor and equity. Recent research has shown risk and vulnerability justification should be added since the poor do not have formal instruments for risk mitigation and coping. There are two main arguments for having social protection. One is an ethical or philosophical argument that safety net to the poor and vulnerable is important for its own sake (intrinsic value), particularly during shocks. The second one is that social protection can be considered as an investment for growth (instrumental value). Similar to the rest of the world, the coronavirus pandemic affected both lives and livelihoods in India. The economic shock was much more severe in India, for two reasons. First, pre-COVID-19, the economy was already slowing down, compounding existing problems of unemployment, low incomes, rural distress, and widespread inequality. Second, India’s large informal sector is particularly vulnerable. There has been an unprecedented shock to the labour market. The lockdown has choked almost all economic activity. But the worst affected are the bottom of the pyramid, particularly the informal workers including migrants. In urban areas, the pandemic has led to widespread losses in jobs and incomes for informal workers. Unemployment has increased from 8.4% in March to 27% in April 2020. There was a loss of 122 million jobs. Out of that, the small traders and casual labourers (daily wage labourers) lost 91 million jobs.
Large part of this article is borrowed from Rangarajan and Dev (2020). * S. Mahendra Dev [email protected] 1
Indira Gandhi Institute of Development Studies (IGIDR), Mumbai, India
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Vol.:(0123456789) ISLE
S134
The Indian Journal of Labour Economics (2020) 63 (Suppl 1):S133–S138
The only asset workers have is labour. They have to be compensated when we tell them not to work during the lockdown. Developed and developing countries have introduced or enhanced several social safety net programmes such as food transfers, cash transfers, employment programmes, prepaid vouchers, and wage subsidies. Informal workers, particularly the self-employed, and the casual workers need income support. In the post-corona crisis situation, India has to address many problems out of which two stand out. First is the improvement of our health care system, and second is the need for the institution of a scheme to provide minimum income support to the weak and vulnerable groups. In this article
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