New Delhi: As the Delhi government announced a lockdown on Sunday, closing all shops, economic establishments and factories in the national capital till March 31 to prevent the spread of the novel coronavirus, Vishnu Prasad, a steel mill daily-wage worker in north Delhi, sensed the beginning of deeper uncertainty and economic hardship.
He had stepped out of his one-room tenement in Azadpur to buy food rations for his four-member family and found that shopkeepers had increased nearly all staple food prices compared to the previous week. “I tried to buy six kilo wheat flour, and instead of Rs 132 for Rs 22/kilo rate, the store owner asked me to pay Rs 156 at the rate of Rs 26/kilo,” recounted Prasad, a migrant from Gorakhpur in Uttar Pradesh.
“Potatoes have gone up from Rs 25/kilo to Rs 30/kilo, dal by Rs 12-15/kilo, and the shops that sold four eggs at Rs 20 are now only giving three eggs at same price.” He added: “I knew about a one-day closure, but within a day the government said it would be a week-long instead. We needed to stock food, but at this rate, it will become difficult.”
Though Delhi chief minister Arvind Kejriwal announced that the homeless and destitute would be provided meals in night shelters, and 72 lakh would be provided 50% more than their quota of food grains for free under the public distribution system, Prasad was worried about cash expenses for medicines, milk and his children’s school fees that he would not be able to afford if the restrictions continued for more than a month.
The closures following the spread of coronavirus may make survival difficult for nearly 90% of India’s workforce, who already earn less than a living wage.
The State of Working India report, an analysis of labour market trends by the Centre for Sustainable Employment at Azim Premji University, Bengaluru, notes that most Indian households work in the unorganised sector and face a low earnings problem.
In 2015, of a workforce of 467 million, 47% were self-employed and 36.5% were casual wage workers, while only 17% were regular wage workers. Among these workers, in 2015, 92% women and 82% men earned less than Rs 10,000 a month. This is nearly half the monthly salary recommended by the Seventh Central Pay Commission of Rs 18,000 as a living wage, according to the report.
According to an International Labour Organisation analysis, only 66% of India’s workers were covered by the minimum wage law in 2010 and about 41% of casual workers earned less than even the Central government’s indicative national minimum wage of Rs 176 a day.
Export-oriented small, medium enterprises
This employment and wage structure makes nearly 90% of all workers susceptible to this crisis.
In north Delhi’s Wazirpur’s steel mills, where Prasad works, over 2,500 small and medium enterprises with an annual turnover of Rs 1,000-crore produce steel exported to the US, Europe, Middle East as utensils, hardware, stoves and steel pipes.
These units process metal sheets in furnaces that run 24 hours all days of the week at extremely high temperatures – 50-250 degrees heat. Though it is hazardous work – chunks of hot steel routinely splinter off causing injuries to workers – Prasad lacks any social protection.
He and 40 other workers in the unit are paid Rs 300 cash for each day they work. This comes to Rs 8,000-9,000 monthly, half of the state’s minimum wage of Rs 17,991 for skilled work. They do not exist on the company’s rolls and have not been registered by their employer under the provident fund or employees’ state insurance schemes for retirement and health benefits.
On March 23, Prasad had only Rs 3,000 cash saved from the last payment he had received of Rs 9,000 on March 10. He speculated that his employer may deduct wages for days not worked, at the usual leave rate of Rs 300/day. “So far, we have not heard from our employer,” Prasad said. “He may deduct or may not deduct wages for this week. There is no guarantee of how he will act with us.”
Jai Bansal, president of the Garam Rolla Employees’ Association, of which 2,500 Delhi steel mills are members, said that the micro, small and medium enterprise sector was already under strain and would be compelled to retrench from among its two lakh workers if the same situation continued after March.
“Production has gradually been slowing since March 15 as we could not source all input parts,” said Bansal. “We can sustain paying contract workers for 7-10 days like this despite closure, but if this lockdown continues into April, we can not pay wages.” Bansal said all the association members pay the workers minimum wages at Rs 14,842 for unskilled work and Rs 17,991 for skilled work such as Prasad’s, though the workers denied this.
The economic situation and work stability is not much better even among those who work in the organised sector, on the establishment’s rolls. Over 120 km from Delhi, at Neemrana industrial area in Rajasthan, there was uncertainty among workers as they waited for their supervisors’ correspondence after chief minister Ashok Gehlot became the first state head to announce an 11-day lockdown a day before Delhi, on March 20.
Seema Sahu, a 19-year-old migrant from Sagar in Madhya Pradesh who works as a contract worker for Rs 8,000 per month at Havells, an Indian fan-making firm with a turnover of over Rs 10,000 crore, said she had a week’s rations at her working women’s hostel where she cooked her meals usually, after work.
It was a similar situation even inside a 500-acre industrial park especially set up for Japanese firms in Neemrana, employing over 10,000 workers.
Meenu Morey, a 20-year-old Adivasi worker from a village in Jagdalpur in Chhattisgarh, 1,500 km away, had come to Neemrana as a trainee under the Pradhan Mantri Kaushal Vikas Yojana, a skill development programme, two years ago. She has Rs 4,000 in her bank account after having worked a year at Daikin, a Japanese air conditioning and refrigeration firm with global sales of $17 billion. She usually transferred the income home, she said. She had a reservation on a train leaving for Chhattisgarh on March 22 but the train was cancelled.
Gudiya Kumari, a migrant from Varanasi in UP, who like Morey works at Daikin, said the firm usually gave three days paid leave for every three months worked. “I joined only two months back and do not know if I will be included in those being given 11 days paid leave now,” she said. “Most of us at this working women’s hostel buy groceries on loan. We note down the purchases at the grocer’s and then we pay him when we get our monthly salary. At this point closer to the end of the month, some have cash, some do not have it at all.”
Rajesh Kumar, from Rajasthan’s Ganganagar district, who is a permanent worker at the same Daikin factory’s maintenance department, said the factory paid 450 permanent employees like him a Rs 20,000 monthly salary. A bulk of the work was done by over 1,000 trainees and apprentices such as Morey and Kumari, employed under the National Employability Enhancement Mission, who were paid half of this at Rs 10,000, and 800 workers employed through labour contractors also paid Rs 9,000-Rs 10,000.
“On Friday night, many of the contract workers could not afford the ticket to go back to their villages back in Jharkhand or Sikkim and they are the most tense right now,” he said. The permanent workers were paid on the last day of the month and the contract workers got their wages on the seventh of every month. It would help workers if the firm advanced their salary payment to this week for all workers, he said.
Manmohan of the Mazdoor Sangharsh Samiti Alwar, a workers’ collective in the district, said 1.5 lakh employees lived in the Neemrana industrial zone, of whom two-thirds were contract workers. “There are currently 70,000 workers stuck here, who could not go home. Most have provisions to cook one meal over one week, as that is what we usually keep, eating one meal at the factory and with little money and no refrigerators at home,” he said.
Pankaj Chaturvedi, a human resources manager at Daikin, told The Wire, “So far we have no orders to retrench or withhold any category of workers’ paid leave. We will follow government orders.”
The Rajasthan chief minister has announced that in urban areas, low-income workers will be provided food packets for two months starting April 1. Manmohan of the Mazdoor Sangharsh Samiti said the workers had got no information yet from the district administration on how and from where they would collect food packets over the next week.
In Gujarat’s Kadi industrial area, 50 km from Ahmedabad, workers at Arvind Mills, an industrial group that employs 25,000 workers across India with a sales turnover of over Rs 5,000 crore, said the company was closed this week but were uncertain if they would receive full wages.
Thakor Kalyanji, who worked at Arvind Mills for 13 years till he was removed in 2015 when he had participated in a strike, said six months back, he had been employed to do the same work as before at the firm as a worker employed through TeamLease Services Limited, a contractual labour supply firm that reported Rs 11.6 billion revenue in operations in March 2019.
“Earlier, I had 15 days paid leave and eight days casual leave, but now when they have hired me a second time through TeamLease, I do not get any paid leave, and I get paid per day worked, at Rs 12,500 for 26 days,” he said. Kalyanji said with Rs 9,700 in expenses on groceries, electricity, his children’s tuition last month, he had Rs 29 in his salary account and Rs 4,000 in his savings account.
The Gujarat government has not yet announced any support measures through the lockdown, and he was worried that without any food or income support, he would not be able to afford staples if this continued for a month.
Amit Basole, an associate professor of economics at Azim Premji University, said such an employment structure makes workers specially susceptible to this crisis. “The vast majority of the workforce either has no employer (the self-employed) or no fixed employer (casual workers, home-based workers),” he said. “Even those who have regular salaried jobs, the job contracts are often oral or precarious. It is possible that in these extraordinary circumstances employers will agree to keep paying workers for a few weeks. But the crisis may persist for longer.”
Basole, along with other development economists, researchers and social activists, proposed that the government provide an emergency relief package programme for each poor household of Rs 7,000 per household per month for the months of April and May. They estimated that the total amount required for this one-time emergency relief came to Rs 3.75 lakh crore, or 1.92% of the gross domestic product.
Along with this, Dipa Sinha, an assistant professor of economics at Ambedkar University and a member of the Right to Food Campaign, said the government must supply free ration along with cooking oil, pulses, salt, masala and soap for at least three months till June to all National Food Security Act beneficiaries, which covers 67% of India’s population, as well as cooked meals twice daily at least till the end of May.
Chandan Kumar, a member of the Working People’s Charter, an initiative of organisations working with labourers in the unorganised sector, said they had recommended a number of protective and preventive measures to the Central Government Economic Response Task Force.
“The Centre must create a Rs 50,000 crore Emergency Workers Welfare Fund to complement the state government relief packages,” he said. “The government must think on the lines of providing cash transfers equal to the state minimum wages, or not less than Rs 10,000 to all constriction workers registered with construction workers boards, street vendors listed under municipality lists, daily wage workers, migrant workers and domestic workers affiliated with trade unions, civil society organisations, those with drivers licenses who ply auto rickshaws, e-rickshaws, and provide protective gear to frontline sanitation workers.”
Kumar also recommended that mortgage and utility payments be waived for two months.
Ravi Srivastava, an economist who was a member of the National Commission for Enterprises in the Unorganised Sector, said that while workers needed immediate assistance in form of food rations as well as income support, the challenge was that most workers are not only in the informal sector but may not be clearly digitally mapped to their employers even now.
“When it comes to even factories in the organised sectors such as automobiles, garments, there is a proportion of workers who figure on company’s wage bills shown as hired through labour contractors, and some continue to be not registered at all, whether on wage bills or those whom employers register with provident fund or employee state insurance corporations,” said Srivastava.
“Though the government has claimed that there has been an increase of workers under the Employee Provident Fund Organisation registration with four million new employees added to EPFO database in 2017, the government has not yet shared data to show whether these were older, existing workers who were added to EPFO later, or if in fact new workers are being hired on more formal terms with proper contracts and provided social security. This makes it hard to plan how any wage support will reliably reach even workers employed by formal industries,” he explained.
Economists have also pointed out that with most Indian workers lacking any written contracts and social security, EPFO accounts, covering only 12.5% of total employment, give only a partial picture and cannot be a means for providing and accounting for cash transfers.
They say if the poor working in such precarious conditions are being asked to stay at home, they will need urgent, massive relief measures as both income support and essential social services.
Anumeha Yadav is an independent journalist reporting on rural and labour policy.