Giving Compass' Take:

• Vijay Mahajan explains the government action needed to support informal workers in India survive the COVID-19 crisis. 

• What role can funders play in ensuring that informal workers are supported during the crisis? Are informal workers in your country receiving support? 

• Learn how informal labor is making India more unequal. 

According to the last published Census of India data, there are as many as 48.2 crore workers in India. Of these, only 3.3 crore are in the formal sector; the remaining 93 percent includes 11.9 crore farmers, 14.4 crore landless agricultural workers, and 21.9 crore non-agricultural workers. Almost none of them get a monthly pay cheque or bank transfer. Their cash flows are dependent on them working.

Agricultural workers are paid daily, weekly, or monthly, depending on their contract with the farmer. But with COVID-19 bringing transportation, mandis, and market demand to a standstill, farmers are starting to face difficulties harvesting their rabi crop. As a result, they’re likely to stop hiring farm labourers, creating a serious cash flow crunch for both farmers and agricultural workers.

The same holds true for informal sector workers earning a living as a machine operator in a small enterprise, a street vendor of vegetables, a barber, a presswala, domestic help, a safai karamchari, a hamal loading and unloading goods in warehouses and transport yards, a small shopkeeper, a contract worker in a mall, and so on. At best, they may have received their wages till March 20th, and some may get something more by the end of the month, but after that the future is bleak, unless life limps back to normal.

Under such circumstances, the government needs to take steps that will:

  • Reach a large number of agricultural and informal sector workers
  • Provide subsistence wages and food supplies
  • Do it with minimal possibility of leakage, corruption, exploitation, and delay
  • Keep the fiscal burden on the government as low as possible

Read the full article about supporting informal workers by Vijay Mahajan at India Development Review.