Loss of income. More debt. The adverse impact on employment and livelihoods because of the first few lockdowns continue to haunt low-income neighbourhoods in Bengaluru even as the city struggles to return to a kind of new normal.
This was revealed in a Bengaluru COVID impact survey (BCIS) by Azim Premji University, in collaboration with nine Civil Society Organizations (CSO). The survey covered 3,000 vulnerable households in 92 low-income settlements across 39 wards in the city, in October-November, 2021.
The survey’s findings included employment and income losses, debt, food security and reach of government support measures on a cross-section of workers, including drivers (cab, auto, and others), daily wage workers (construction and others), domestic workers, and factory workers (garment and others).
Dr Amit Basole, Associate Professor Economics, School of Arts and Sciences, Azim Premji University, and author of the survey, gave insights into the process.
“We conducted the survey with CSOs that have been supported in COVID relief work by Azim Premji Philanthropic Initiatives,” said Dr Basole. “We designed a questionnaire and our main question was what the continuing effects beyond the lockdowns are. We asked the organizations to give a list of settlements where they were already working and we had a list of people who they were supporting. We trained the volunteers from the same organizations to carry out the survey.”
In a telephonic interview with Citizen Matters, Dr Basole talked about the key findings of the survey. Excerpts.
Job and earning loss
Due to continued unemployment, the survey found 41% of workers had no work and another 21% had reduced earnings even in January/February 2021. Seven months after the lifting of the first lockdown, in January-February 2021, unemployment stood at 47%, significantly higher than pre-COVID levels. By October 2021, though unemployment rate at 22% were back to pre-COVID levels, 11% had still not recovered from job loss with women (15.8%) being worst impacted.
Earning loss was also reported. In January/February 2021, earnings remained 10% below pre-COVID levels. By October 2021, though in absolute terms earnings recovered to pre-COVID levels, though when adjusted for inflation, earnings remained below pre-COVID levels.
Before the second wave, earnings were 10% below pre-COVID levels. For Muslims, this number was 18%. Nominal earnings in October 2021 had recovered for all except OBCs (8% lower). But Consumer Price Index (CPI) was up by 11.4% between February 2020 and October 2021. Hence earnings in real terms have still not recovered.
Debt and food security
As jobs and earnings were affected, there was an increase in borrowing. The survey found 11% households were forced to borrow for daily expenses or to repay older loans. But 12% households were unable to borrow for various reasons (higher for Muslims and OBCs). An additional 15% did not borrow but had to sell or pawn assets, mostly jewellery. Reliance on informal sources for borrowing increased during COVID.
There was also a decline in food intake with 40% reporting lower food intake during the COVID period when asked whether current food consumption was back to what it was before the pandemic.
Effectiveness of government schemes
Karnataka government schemes: only 3% households reported receiving anything under the cash transfer schemes announced by the state government. Those who did receive it were washermen, barbers, auto & taxi drivers (28%). Other categories of workers who got received cash transfers were:
• Construction workers: 24%
• Building workers: 17%
• Asha workers: 4%
• Artists, writers and handloom workers: 4%
In comparison, the Public Distribution System (PDS) worked better with 55% households with BPL cards saying they received more than the regular quantity of grains in all months since second lockdown. Another 32% got additional grains during a few months.
Women not having Jan Dhan accounts was another big issue, with 78% of households not having one mainly because of lack of access. Among those who had an account, 75% reported receiving some transfer and 40% reported receiving the full Rs 1500.
Conditional on there being a child under age six or pregnant/ lactating mother, the percentage of households reporting getting supplementary nutrition or alternatives from anganwadis/ICDS during Covid went up to 38% (vs 24% in pre-COVID times).
The survey highlighted policy suggestions to improve the situation. Livelihoods have been adversely impacted over a long period of time. Even if jobs come back, the survey concluded that debt burden and other effects (health, education, nutrition) are long term.
Other findings which point to learnings that need to be implemented.
● PDS played a crucial role as a safety net. But cities lack a programme similar to MGNREGA, which has played a big role in villages. We have seen in many studies, not just this one, that PDS has been the mainstay of the safety net.
● Six states currently have urban employment programmes, many introduced in response to COVID. These include Kerala (pre-existing), Odisha, Jharkhand, Himachal Pradesh, Tamil Nadu and Rajasthan.
Karnataka can also think of introducing such a programme that can provide work to casual wage workers as well as the self-employed.
With MNREGA you will only need to show up when you need it. And that’s why an urban employment programme would be good for the urban poor.
● Cash transfers have not proved effective due to lack of reach as well as inadequate amounts.
Strengthening of cash transfer system
Creative ideas are needed to reach a larger number of vulnerable households with effective amounts of cash relief. Jan Dhan penetration among really poor households is quite low.
The Karnataka government had announced cash transfer schemes but that had even less penetration than the national schemes.
For cash transfers to be effective, there needs to be a digital infrastructure, a bank account, some amount of digital literacy to withdraw.
In Karnataka, Information such as driving licenses and labour cards, for example, can be collated and a bank account link system can be done to improve reach of cash transfers.
But nothing can be done overnight, the digital infrastructure has to be improved, and we need to have a plan to have a good safety net.
The most affected
Depending on whether you look at it from an occupational and identity point of view there are two kinds of answers to the question of which vulnerable section was most impacted. From an identity perspective, women were hit very hard in multiple ways. Not only did they tend to lose work, they found it difficult to return to work even as their responsibilities went up much more after the pandemic and they experienced more violence.
The other big category that has been hit is youth. Though not a part of this survey, educated youth are coming out as poorly trained and not getting work.
Muslims were disadvantaged in particular ways. It’s not that they were losing more work. But in other instance, say in getting loans, Muslim households had a harder time.
Occupationally, the survey found that people who work in malls, daily wage workers, others in the service industry were much more likely to lose work compared to home-based workers who were much more likely to continue, like agarbatti and beedi workers.
How did people cope?
There was a shift to informal sources of borrowing relative to before the pandemic. The reliance on friends, family, employers and moneylenders went up because those were the sources where you could get quick non-secured loans.
We think that, after talking to the organizations that did the surveys, the numbers are likely to be under estimates. The percentage of people who said they borrowed or had to sell/pawn jewellery, could be higher as people are not comfortable disclosing that information. There are also rules that microfinance institutions don’t lend if you already have a lot of outstanding loans, so people have an incentive to hide information.
The survey was conducted in collaboration with Action Aid, Association for Promoting Social Action (APSA), The Center for Advocacy and Research (CFAR), Hasiru Dala, Gubbachi, Reaching Hand, Sangama, Swabhimaan Trust, and Thamate.