Perils of lockdown and informal sector workers: Reflections in the time of Covid-19

Amrita Ghatak* &
Kingshuk Sarkar**
The unprecedented fear of Covid-19 leading to ‘social distancing’
through lockdown in the entire India has yet again unfolded the plight of
informal sector workers even in the midst of a universal public health crisis
worldwide. The lockdown, for a huge number of informal sector workers is associated
with the loss of livelihood; but for others engaged in low-valued essential
works such as home delivery, scavenging and cleaning the society, selling
vegetables, groceries and milk, it is associated with exposure to Covid-19
risks. For this large section of informal sector workers the lockdown
essentially means a trade-off between starvation and exposure to the pandemic
risks or overwhelming fear of Covid-19. Paradoxically, the frequent events of
deaths due to TB and diarrhoea have neither attracted the ‘emergency’ status in
the realm of public policy nor generated fear among people in India. These scenarios
make one reflect, why are there such divergent practices even at policy level? Do
public health issues have visible class bias? Are middle class insecurities in
dealing with random Covid-19 threat pushing the boundaries of precarious
employment opportunities in the informal sector further? 

As India is witnessing almost
complete shutdown because of probable unprecedented spread of Covid-19 virus the
intensity and magnitude of health – economy relationship is unfolded explicitly.
We have never seen such a universal public health crisis with devastating
impacts on economic activities. Although implications of illness on expenditure
and loss of income are well-discussed in the contexts of both developed and
developing countries, the enormity of the impacts of a contagious disease like
Covid-19 on the livelihood of people, particularly those in the informal sector
forming around 93 percent of India’s work-force, has never been experienced

Regular life has come to a
standstill practically, and economic activities severely curtailed. All these
have serious short-term as well as long term economic consequences. This is a
global phenomenon as Covid-19 spread is across the globe for over last two
months originating in the city of Wuhan in China. Now this is termed as
pandemic given the quantum of spread and severity. No vaccine could be
developed till now. As doctors and scientists suggest, it is expected that at
least 12-16 months will be needed to develop the vaccine against Covid-19,
followed by several trials before the vaccine is actually made available in the
market for public. Until then, multiple surges of Covid-19 are expected. So,
the practice of lock-down in States will have the lingering effects even in
future as the case may be.

There are cases of Corona
infections all over the country with States like Maharashtra and Kerala leading
the numbers of positive cases. As on March 25, 2020, morning, there were 593 active
cases with 43 recovered or migrated and 13 dead. Given the growth of positive
cases in India the experts opine, ‘assuming the 3.4 per cent fatality rate
relative to confirmed cases calculated by the World Health Organization, India
is headed for nearly a million confirmed cases by the end of May and over
30,000 deaths. These are conservative estimates. A team of bio-statisticians
used predictive modelling and estimated that the number could be even higher,
reaching nearly a million cases by 15 May 2020 (Rukmini, 2020). Therefore, both
Centre and State governments are taking steps to prevent and control spread of
the virus. During the last few days, While States in many instances imposed
almost complete lockdown soon after the Janta Curfew was over on March 22 at 9
PM; finally the honourable Prime Minister of India has announced a complete
lock-down throughout the country from March 25 to April 14, 2020, for 21
days.  While scientists and doctors opine
that 21 days are useful in breaking the Covid-19 cycles, it is also seen
globally that the practices of lock-down had to continue for 28 days or even 41
days to break the Covid-19 cycle. This means, India may still have to extend
and continue with the lock-down in order to ensure the social distancing and
break the Covid-19 cycle, so that the country doesn’t reach third stage of
infection through the community contacts. 

As we mentioned in the beginning,
given the nature of the Indian labour market such lockdown has serious
consequences for vast majority of people who derive livelihood from precarious
economic activities and belong to the lower economic class in the society. Such
activities are informal, fragile and fringe in character. Let’s discuss the
enormity of the problem. The Economic Survey of 2018-19, released on July 4,
2019, says 93 per cent of the total workforce is ‘informal’. The Periodic
Labour Force Survey (PLFS) of 2017-18 released in May 2019, gives a glimpse of
it. It says, even among the regular wage/salaried workers in the
non-agriculture sector (of the informal sector), 71.1% had no written job
contract, 54.2% were not eligible for paid leave and 49.6% were not eligible
for any social security benefit. India’s Labour Force Participation Rate
dropped to 51.8 % in Dec 2019, compared with 51.9 % in the previous year.. In
2018, about 27.05 percent of the Indian population fell into the 0-14 year
category, 66.77 percent into the 15-64 age group and 6.18 percent were elderly
over 65 years of age
Population of India is projected to be close to 1.37 million in 2011. As per
68th round survey of employment and unemployment status by NSSO conducted in
2011-12, 52 per cent of the informal sector workers are self-employed and 28
per cent are casual labourers (Government of India, 2011).

Thus, economic cost of such shut
down is way too high for vast number of informal sector workers. Given the age
distribution of population in India, 90 million people belong to the working
age population. Since the labour force participation rate is around 51.8 per
cent, size of the labour force is 46 million. As 93 per cent of the labour force
is in informal sector, size of the labour force in informal sector is 43
million. Out of this, 52 per cent are self-employed that those who are engaged
in petty economic activities without any visible employer. In absolute terms,
size of such self-employed persons in informal sector is 22 million. Casual
workers constitute about 28 per cent of total informal sector workforce. In
absolute terms, casual workers number 12 million. Self-employed and casual
workers together constitute 34 million workers. Assuming family size of four
and one worker from each family, total dependent population figure around 100
million people. Therefore, the Shut-down clearly has the potential of ruining
livelihood of such large number of people.

This essentially happens because
informal activities particularly self-employment and casual employments are
support activities in urban and rural informal workspace. When shut-down
happens, such livelihood opportunities are lost. These informal workers are
daily-earners and earnings are just enough to support basic sustenance. They do
not have scope for making savings and there is nothing they can fall back upon.
Road-side food sellers, vendors, hawkers, cycle repairing shops,
rickshaw-pullers, small shops, home-based workers, agricultural extension
workers, domestic workers, and construction workers are examples of such
informal sector workers. In case of shut-down, these occupations too stop and
earnings become non-existent. Soon such workers face spectre of starvation.

One can also bring the question
of using unspent welfare cess for construction workers as raised by Sonia
Gandhi. It is also important to highlight that the Finance Minister Nirmala
Sitharaman has recently announced several support mechanisms viz. Coronavirus
lockdown relief packages under Ujjwala scheme, Jan Dhan Yojana, Deen Dayal
Upadhyaya National Rural Mission scheme targeting various groups of individuals
such as women, poor widows, elderly, divyang, construction workers, organised
sector workers and women self-help groups. But, like all welfare schemes in
India these packages will also be subjected to their own shortcomings in
reaching the target groups. How far these relief packages are able to reach the
target beneficiaries and meet their livelihood needs, are the apprehensions
that loom large among a vast section of informal sector workers at this
moment.  While these packages can address
the need of those workers and their families in the short run, as we mentioned
earlier, the lock-down has a long-term effect of perpetual joblessness and thus
perpetual food deficiency, which will be even more challenging to the economy
and society for years to come. With the economy being pushed on a standstill
mode for a fairly long duration of 21 days, the repercussion will be seen in many
other further struggles such as running the MSMEs, job losses and worsening of
already unfavourable terms of employment even when the Government withdraws the
lock-down after April 14, 2020. The similar apprehension is perceived even
against the short-run relief with the announcement of waive of EMIs by RBI. Given
the status of Banks, fiscal deficits and low level of tax earning by the
government, it is expected that the huge burden of non-payment of EMI will be
percolated to the people in the long run!

The Replacement of a stable
source of livelihood by the relief packages thus leaves a lot of real threats
to the livelihood of a large chunk of population who already suffer from
various deprivations in opportunities, entitlements and endowments of human and
financial capital and of course food and nutritional deficiency. The
demographic advantage that could have been garnered through health and working
capacity of working-age population may now be translated to be burden with
lower nutritional status, compromised immunity, inferior terms of employment
and joblessness perpetuated in deterioration of overall labour productivity in
the country. State is mulling leave with wages during the period of shut-down.
Employers in both formal and informal sector workers were instructed to pay
wages to the workers during the period of lockdown. To what extent employers
would provide paid leave is a concern. Significant amount of cess money is
available with the State Welfare Board and few suggestions have come up to
utilize this for use of informal sector workers to tide over impending income
crisis. Moreover, for self-employed, that is for 22 million labour force, there
is no explicit employer. There is no mechanism to ensure that basic minimum
support reaches such workers. Concept of paid leave is redundant here. Similarly,
the terms of employment for casual workers of size of 12 million do not go
beyond a day. Provision of free rations through public distribution system can
be at best partial solution and States do not have infrastructure to reach
homes of such number of persons in a context of total shutdown.

From another perspective, in
general, the public health scenario is very poor in our country. World Health
Organization (WHO) estimates that in India approximately 300,000 people die
from TB each year (World Health Organization, 2014). 150,000 children die
because of diarrhoea every year in India (Bhan, 2013). Together, TB and Diarrhoea
account for 450,000 deaths each year in India. That implies every five minutes
4 people die of TB and Diarrhoea. But such deaths are never declared as medical
emergency. Such deaths are imminently preventable. Still those continue to
happen but we seem to immune to that kind of phenomena. Compare this with the
response to the threat of Covid-19 virus epidemic which is a global phenomenon.
This is being declared as pandemic and war-like emergency measures are in place
through The Epidemic Diseases Act 1897 and National Disaster Management Act
2005. The country is bracing for complete shut-down for three weeks at least
from Marc 25 to April 14, 2020. Except essential services all kinds of economic
activities are being suspended. Since Corona virus is highly infectious and
spread through human contact in a rapid manner, such emergency measures are
deemed to be appropriate by large section of the population. It is expected
such shutdown will break the chain and the country can tide off the impending

There are two very important
issues that crop up in this context: First, while there is no arguing the fact
that prevention of spread of Covid-19 should get utmost attention from the
State in particular and society in general, the fact still remains that we do
experience very significant number of deaths as espoused above. Such deaths did
not elicit kind of attention that Covid-19 virus is getting. Second, the
shut-down has hit severely the informal economy and very large number of casual
and self-employed workers are already facing starvation-like situation. Nevertheless,
one cannot deny that the nutritional deficiency looms large among a vast
section of people who are largely engaged in the informal workspace. Elderly
and young ones are at higher risks they suffer more from undernourishment or
food deficiency and hence are expected to have compromised immunity level in
India. The trade-off is between starvation/malnourishment and Covid-19 spread.
Getting infected by Covid-19 virus is still statistically having low
probability, however if shut-down continues, probability of suffering
starvation is almost real. The dominant narrative is so overwhelmingly in
favour of shutdown, that the loss of livelihood of 34 million workers is rarely
discussed in public domain as well as at the policy-making level. This raises
the fundamental concern of a welfare state: whose welfare the lockdown is meant
for? Although it appeals to the human race and seemingly the entire world is
fighting against covid-19 as one human race keeping all other identities and
differences aside, in developing countries like India, the lockdown protects
mainly the middle class, upper middle class and the rich. The continuity of
essential goods and services rather makes the life of middle class and rich
comfortable while they ‘stay home’ at the cost of exposure of the people who
are engaged in the production and deliveries of those goods and services. 

Such divergent practice in
dealing with public health issues and indifference towards the plight of large
number of informal sector workers do have plausible explanations. The rich and middle
class are highly apprehensive about Covid-19 virus since it is random and
unknown. No vaccine exists as off now. Moreover, Covid-19 is class-neutral. On
the contrary, undernourishment, TB and Diarrhoea are not class-neutral and
happens mostly in a particular socio-economic space mainly in urban ghettos,
slums, rural areas wherein the relatively low-class people and migrants reside.
Also these diseases are preventable to a great extent. Privileged and middle or
upper middle and the rich apprehend something which is random and has no
protective vaccine. They can protect themselves from such diseases like
diarrhoea and TB, but feel extremely insecure about the unknown Covid-19 virus
and its epidemic potential.

Particularly the middle-class who
does have a strong voice in an electoral democracy and is in a position to
influence policy-making, is more guarded and taking all the pre-cautions
including complete shutdown to prevent Covid-19 epidemic at any cost. This is
also important to highlight that all the low-valued works such as sweeping,
scavenging, and home deliveries need to continue for the sake of larger social
benefits even at the time of lock-down. So, while a section of low class people
engaged in unskilled or semi-skilled low-valued services continue to be anyway
more or less exposed to the Covid-19 risks, others are bound to even loose the
source of livelihood as a direct consequence of lock down. Thus, as espoused
above, such lock-down is going to hit large number of informal sector workers
and their families very hard since it would snatch even the precarious
livelihood opportunities that exist till now. Shut-down here is imposition by
the State which may seem appropriate by the economically secured section of the
economy but very detrimental to large sections of the populations. Self-
employed and daily wage earners face a very bleak prospect. They might survive
Corona scare but very likely to face starvation kind of situation.

Challenges for the low-end
working class get relegated to the background in policy parlance and middle
class insecurities and apprehensions get priority. A large number of informal
footloose workers are finding it increasingly difficult to sustain life. They
are losing jobs and some of them returning to their home States further
complicating the questions of both Covid-19 spread and unemployment. Complete
shut-down is making the matter worse as availability of communication mediums
across States is limited and under close surveillances. The crux of the matter
is that aspirations and apprehensions of the middle and privileged class dictate
the State policy to a great extent across geographic locations. Public health
issues are not dealt with in a holistic manner. Solutions are piece-meal and
lack eco-system needed for cohesive decision-making.

*Amrita Ghatak is an Assistant Professor, Gujarat Institute of Development Research, Ahmedabad Email:

**Kingshuk Sarkar is an independent researcher in social sciences and works as Joint Labour Commissioner, Govt. of West Bengal; Email:

Bhan MK (2013). Accelerated
progress to reduce under-5 mortality in India. Lancet Glob Health. Pages 172–3
Global Tuberculosis Report. (2014).
World Health Organization, Geneva
Government of India (20011 or
2001?), Task Force on Employment Opportunities,
Government of India (2019),
Economic Survey 2018-19, Ministry of Finance
Government of India (2019),
Periodic Labour Force Survey 2017-18, May
accessed on March 24, 2020
Key Words: Informal sector
workers, epidemic/pandemic, livelihood, middleclass insecurity, public health,