Need cash support, more rural jobs to tackle Covid impact: Azim Premji University

Azim Premji University has proposed the government to undertake additional spending to support extension of free rations beyond June till the end of the year, to offer `5,000 crore cash transfer for three months to as many household

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Additionally, lower chances of further rate cuts on the back of global inflation continue to add to their worries

Azim Premji University has proposed a host of measures including direct cash transfer and expanding the rural employment guarantee scheme (MGNREGS) entitlement to 150 days per household — requiring the Centre around Rs 5.5 lakh crore additional spending — to mitigate the potentially larger impact of the second Covid wave on work, income, food security, health and education.

The central government has “compelling reasons” to undertake additional spending to support extension of free rations beyond June till the end of the year, to offer Rs 5,000 crore cash transfer for three months to as many households as possible and to expand MGNREGA entitlement to 150 days from 100 days now, and increase the budget under the rural employment guarantee scheme to at least Rs 1.75 lakh crore from Rs 73,000 crore allocated in the Budget for 2021-22.

In a report that documents the impact of Covid-19 in India in the last one year on jobs, income, inequality, and poverty, the university also suggested launching of a pilot urban employment programme in the worst-hit districts focusing on women workers hit hard in the pandemic. It also suggested a Rs 5,000 per month Covid hardship allowance to 2.5 million Anganwadi and ASHA workers for a period of six months.

The report shows that the pandemic has further increased informality and led to a severe decline in earnings of the majority of workers, resulting in a sudden increase in poverty. In April and May, the poorest 20% of households lost their entire incomes. In contrast the richer households suffered losses of less than a quarter of their pre-pandemic incomes. Over the entire eight-month period (Mar to Oct), an average household in the bottom 10% lost `15,700, or just over two months’ income.
“Of the decline in aggregate income, 90% was due to reduction in earnings, while 10% 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,” it said.

Mobility restrictions, caused by lockdowns, led to income losses due to decreased economic activity. The report found a 10% decline in mobility was associated with a 7.5% decline in income. Many households coped by reducing food intake, borrowing, and selling assets as government relief has helped avoid the most severe forms of distress, but the reach of support measures is incomplete, leaving out some of the most vulnerable workers and households, the report said.

The report said about 100 million lost jobs during the nation-wide April-May 2020 lockdown. Though most of them were back at work by June 2020, but by the end of 2020, about 15 million workers remained out of work. Job losses were higher for states with a higher average Covid case load. Maharashtra, Kerala, Tamil Nadu, Uttar Pradesh, and Delhi, contributed disproportionately to job losses.

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First published on: 06-05-2021 at 07:49 IST