Covid-19 crisis could push 40 crore workers in India into poverty, says ILO

In its latest report, published on 8 April, ILO states that since the COVID-19 pandemic has further accelerated in terms of intensity and expanded its global reach. Businesses across a range of economic sectors are facing catastrophic losses, which threaten their operations and solvency, especially among smaller enterprises, while millions of workers are vulnerable to income loss and layoffs.

The Covid-19 pandemic is already affecting tens of millions of informal workers across the globe. In India, however, the number of workers in the informal economy affected by the lockdown and other containment measures is substantial. Several trade organisations have also written to the finance minister seeking relaxations and waivers in taxes and loan interests apart from stimulus packages.

According to ILO, in India, with a share of almost 90 per cent of people working in the informal economy, about 40 crore workers in the informal economy are at risk of falling deeper into poverty during the crisis. Current lockdown measures in India, which are at the high end of the University of Oxford’s Covid-19 Government Response Stringency Index, have impacted these workers significantly, forcing many of them to return to rural areas.

"The impact on income-generating activities is especially harsh for unprotected workers and the most vulnerable groups in the informal economy," it stated.

As of 1 April 2020, the ILO’s new global estimates indicate that working hours will decline by 6.7 per cent in the second quarter of 2020, which is equivalent to 195 million full-time workers. The majority of job losses and declining working hours will occur in hardest-hit sectors, it said.

The ILO estimates that 1.25 billion workers, representing almost 38% of the global workforce, are employed in sectors that are now facing a severe decline in output and a high risk of workforce displacement. Key sectors include retail trade, accommodation and food services, and manufacturing.

It said that regardless of the place or sector, the crisis is having a dramatic impact on the world’s workforce. "Policy responses need to focus on providing immediate relief to workers and enterprises in order to protect livelihoods and economically viable businesses, particularly in hard-hit sectors and developing countries, thus ensuring the conditions for a prompt, job-rich recovery once the pandemic is under control," the report stated

Limited public resources need to be used to encourage enterprises to retain and/or create jobs, it suggested.