In Covid-hit India, 23 crore people earn less than Rs 375 per day: Study

India’s financial system staged a formidable restoration after the primary wave of the Covid-19 pandemic, however the alarming rise in poverty tells a unique story concerning the nation’s future financial outlook.

The nation’s subsequent massive problem may come up as a result of a pointy leap in poverty, triggered by a document drop in revenue ranges, jobs and widening wealth hole. All these financial indicators are prone to worsen as India struggles against a deadlier wave of Covid-19.

A current research by the Centre for Sustainable Employment (CSE) at Azim Premji University, which goals to doc the affect of 1 12 months of Covid-19 pandemic in India, presents a grim image of post-Covid India.


The research, titled State of Working India 2021 — One year of Covid, paperwork the affect of 1 on jobs, incomes, inequality, and poverty.

One of essentially the most alarming observations of the research is that an extra 230 million or 23 crore Indians fell beneath the nationwide minimal wage poverty line because of the devastating financial affect of the pandemic. All these people are actually incomes beneath the nationwide minimal wage threshold of Rs 375 per day, as beneficial by the Anoop Satpathy committee.

Read | Explained: How Covid-19 crisis has exposed India’s growing wealth gap

“This amounts to an increase in the poverty rate by 15 percentage points in rural and nearly 20 percentage points in urban areas. Had the pandemic not occurred, poverty would have declined by 5 percentage points in rural areas and 1.5 percentage points in urban areas between 2019 and 2020, and 50 million would have been lifted above this line,” the research mentioned.

It recounted how crores of people who misplaced jobs throughout the strict nationwide lockdown in 2020 and mentioned that a median family of 4 members noticed their month-to-month per capita revenue fall to Rs 4,979, beneath the pre-pandemic degree of Rs 5,989 as of October 2020.

Also Read | Unemployment rate rises as Covid-19 returns to haunt Indian economy

“Of the decline in aggregate income, 90 per cent was due to reduction in earnings, while 10 per cent was due to loss of employment. This means that even though most workers were able to go back to work they had to settle for lower earnings,” the research famous.

The research means that poorer households, who’re nonetheless struggling to earn an honest residing, have been hit hardest throughout the first wave of the pandemic. “Though incomes fell across the board, the pandemic has taken a far heavier toll on poorer households,” the research mentioned.


Even after extra staff rejoined the labour power after the nationwide lockdown was step by step eased, a rise was largely seen in casual employment.

“Nearly half of formal salaried workers moved into informal work, either as self-employed (30 per cent), casual wage (10 per cent) or informal salaried (9 per cent) workers, between late 2019 and late 2020,” the research famous.

This signifies how salaried jobs within the nation lowered after the pandemic and people have been compelled to search for self-employment choices. For the poorer households, the one choice was to grow to be every day wage labourers.

Also Read | Pandemic pushed over 3 crore Indians out of middle class: Pew Research

“Agriculture, construction and petty trade emerged as fallback sectors. Education, health and professional services sectors saw the highest outflow of workers into other sectors. About 18 per cent of education sector workers were now in agriculture and a similar share of health sector workers were engaged in petty trade,” the research mentioned.

As a consequence, largely earnings of employee fell on a median by 17 per cent throughout the pandemic. Self-employed and casual salaried staff confronted the “highest loss of earnings”.


The sheer lack of revenue left poorer households with no alternative however to chop down on meals consumption or promoting property. They have been additionally compelled to borrow from buddies, household and cash lenders.

“An alarming 90 per cent of respondents in the Azim Premji University CLIPS reported that households had suffered a reduction in food intake as a result of the lockdown” the research mentioned.

Also Read | Hunger, poverty and jobs: India’s poor pay heavy price in fight against coronavirus

Even extra worryingly, 20 per cent reported that meals consumption had not improved even six months after the lockdown. These findings are in keeping with different Covid affect surveys.”

While measures launched by the federal government just like the Pradhan Mantri Garib Kalyan Yojana (PMGKY) and the Atmanirbhar Bharat packages helped poorer households in 2020, the research signifies that bolder measures are required in the long term as India faces a deadlier wave of Covid-19.

“So far, India’s fiscal response to Covid, amounting to around 1.5-1.7% of GDP, has been conservative,” the research mentioned, including that the impacts of the second wave are “still unfolding”.

“Further, coming as it does on the back of depleted savings, debt, and reduced fallback options, the second wave can lead to potentially larger impacts on work, incomes, food security, health and education.”


Some measures that would assist cut back poverty in India embrace an extension of free rations below the Public Distribution Scheme (PDS) — not less than until the top of 2021 — together with a money switch of Rs 5,000 for 3 months for susceptible households.

The entitlement of the MGNREGA scheme, which performed a vital role as a safety net in rural areas, must be expanded to 150 days and the whole finances of the programme must be raised to not less than Rs 1.75 lakh crore, advised the research.

The pandemic has had an equal affect on the poorer inhabitants residing in main cities and an city employment programme in worst-hit districts must be launched. This ought to deal with girls staff, who’ve been hit more durable by the pandemic than their male counterparts.

The authorities, subsequently, must roughly improve spending by an extra Rs 5.5 lakh crore and “bring the total financial outlay on Covid relief to around 4.5 per cent of GDP over two years”.

“We believe that this large fiscal stimulus is justified given the magnitude of the crisis. For example, the proposed cash transfer is just equal to incomes lost last year by the poorest 10 per cent of households, leaving alone the second wave impact,” the research mentioned.

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