Squeezed in the back of a truck with 30 others and facing a 1,500-kilometer journey to his village in Gorakhpur, Ajay Srivastava was a worried man.
The 40-year-old pipe factory worker had shelled out his last remaining rupees for the ride home after India suddenly locked down the nation to guard against the coronavirus.
“We were living off our savings and now even that’s getting depleted,” said Srivastava while still about 1,000 kilometer from his home in eastern India.
“The last we got paid was on March 22. For the local government we don’t matter since we can’t vote here. The factory owner ensured we got food because he wanted to see us around whenever he restarted his business.”
Hundreds of thousands of workers face a similar fate. The Indian economy shed as many as 114 million jobs in April, according to estimates by the Centre for Monitoring the Indian Economy (CMIE), a local think tank.
Small traders and laborers accounted for 91.3 million lost jobs, while entrepreneurs and salaried employees accounted for most of the rest.
A four-hour notice to shut down delivered by Prime Minister Narendra Modi stunned the nation on March 24. The lockdown almost immediately left factory workers, daily earners, small businessmen and many others jobless.
Workers who kept their jobs were suddenly forced to share their cramped living spaces with others who usually worked alternate shifts.
In a Covid-19 twist, the number of those working as farmers actually rose by 5.8 million. Agriculture in India is notorious for its high level of disguised employment, lopsided dependence and low per capita productivity. Cities don’t have enough jobs for everyone, so surplus workers continue living off the land by doing odd jobs.
The unemployment rate shot up to 27.1% in the week ended May 3, after closing April at 23.5%, according to the CMIE. Data for the first week of May indicated the jobless rate could worsen the longer the lockdown is prolonged. That’s a grim outlook for a nation of 1.38 billion people in which more than three in four are poor.
“Initially, a lockdown only hurts the most vulnerable labor that is informally employed in unorganized sectors. Gradually, it starts hitting the more secure jobs. Startups have announced lay-offs and industry associations have warned of job losses,” Mahesh Vyas, managing director and CEO of CMIE, wrote in his report, adding that job losses were happening across various sectors.
What makes the scenario worse is that the economy, which was already slowing before the pandemic, could report an unprecedented -5.2% growth in the year to March 2021, according to a Nomura forecast.
Maruti Suzuki, which sells more than half of all cars in India, reported zero sales in April. Society of Indian Automobile Manufacturers President Rajan Wadhera said plant closures would cost automobile equipment and components makers a loss of 23 billion rupees (US$304 million) per day.
Hard numbers
Of India’s 520 million workers, about 16% are engaged in industry and 37% in services. They contribute 25% and 60% respectively to the Indian economy. Agriculture employs as many as 47%, but contributes a measly 15% to the economy.
The employment of small traders and laborers fell from an average of 128 million in 2019-20 to 116 million in March and only 37 million in April, according to Vyas. Up to 71% of wage earners lost their jobs, and even 23% of large entrepreneurs who own fixed assets reported job losses.
Entrepreneur Kirit Shah, an exporter of chemicals and plastic items, has been bewildered by the turn of events since mid-March. His company’s turnover has nosedived, he says, and forecasts the rest of the year would be a washout.
“Almost all the workers have left, and the remaining few are making desperate efforts to leave,” said Shah, 59, who’s been running the business for four decades and has never faced a similar situation. His countryside plant employs about 40 workers to make plastic items for US and European markets.
A Mumbai-based factory owner was less polite and called the present situation a “self-inflicted, needless gash.”
“It could have been totally avoided with some basic sense and planning. Instead of four hours, a notice of four days should have been given to the people to be able to plan and move,” he said, declining to give his name.
Most people who tried to leave when the lockdown started became stuck and resorted to desperate measures such as walking or riding a bike thousands of miles, risking their own lives and those of their children and the elderly.
Before sporadic reports of deaths along the way became normal, the news of 19 workers being run over by a train early one morning last weekend stunned the country. The laid-off workers had been walking along the tracks to find their way home until exhaustion kicked in and they lay down to sleep.
Many are headed home in hope they can help to harvest standing crops, get their share and wait to sow paddy as the monsoon rains hit peninsular India from next month.
Some factory owners fear their workers may not return until the monsoon is finished in around late September and are pushing various state governments to either stop them from leaving or force them to return.
All eyes are now on whether the government will relent on certain lockdown measures on May 17. That’s not soon enough for most.
State governments are running out of money so they have permitted the opening of revenue-generating liquor shops. Others argue the government should open up certain economic activities for individuals as families before their savings are completely depleted.
“The economy has gone into an irreparable damage mode and a speedy downward spiral,” one businessman said.