Home » The effects of the second wave of the epidemic on the poor and employment

The effects of the second wave of the epidemic on the poor and employment

by Vijay Garg
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By: Vijay Garg

Even before Kovid-19, the growth rate of India’s economy had slowed down, but the epidemic has hit the economy hard.  According to a survey conducted by Azim Premji University, the epidemic has pushed 236 million people below the poverty line.  According to the survey, the poorest households had to borrow the most.  If these loans are viewed in terms of the income of poor families, it is very difficult for them to repay these loans.  Most of the loans were taken from the informal sector with high interest rates.  In this way, millions of families will be forced to live in extreme poverty for many years, the biggest meaning of which is that their access to education and healthcare will become almost impossible.  The survey also said that governments were neither clear about the impact of the lockout on the economy nor were there specific plans in place to help those with less resources.
On the other hand, according to Reserve Bank of India (RBI) Governor Shaktikanta Das, India’s GDP growth rate will average 10.5 per cent in FY 2021-22.  An RBI report said demand for goods would remain strong in rural areas and increase in urban areas.  The report, released in the first week of April, hoped that a reduction in the number of Kovid-19 cases and an increase in vaccination would boost the economy.  In April, the number of Kovid-19 cases increased rapidly and the country’s healthcare system was seen to be crumbling.  Health experts, on the other hand, said they had warned the government in the first week of March that altered forms of Kovid-19 would affect a large number of people and needed to be prepared for.  The key question is whether the government has acted on the information available.  That information does not appear to have been shared with allied departments, including the country’s central bank, the RBI.  Maybe if the RBI had this information, it would not have made such claims about the country’s growth rate.
According to a survey by Azim Premji University, 7 per cent of unemployed men and 46.6 per cent of women lost their jobs due to the epidemic.  It is to be noted here that even before the epidemic, the unemployment rate in the country was the highest in the last 45 years.  The survey also found that 53 per cent of fixed-wage workers went to work where they were not paid;  9.8 per cent became day laborers, 8.5 per cent temporary jobs and 34.1 per cent self-employment.  Thus, there is no correspondence between the RBI’s claims and the facts.  The country’s major industries such as tourism, construction, transport, textiles, steel, etc. are all in decline.  With the decline in people’s wages, the demand for goods in the market is likely to increase.  The biggest gainers are Internet, mobile and pharmaceutical companies.  In such cases, the government should act on the basis of factual reports.  The Premji University survey recommended that the central government should increase the budget for MGNREGA and old age pensions and provide direct financial assistance to low-income families.  The government needs to consider these recommendations.

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