• The JSBF Report

Informal Workers' crisis during COVID-19

By Sanjana Jain, Baljinder Sekhon and Shrey Agarwal.


Source: Deccanherald


“They came, they saw but they did not conquer[i].”


Hopes of greener pastures brought millions of migrant workers to cities. While some were able to make a better living, most struggled to find their feet.


The sudden and severe lockdown due to the COVID-19 pandemic in India has become a nightmare for migrants, especially informal workers. The industries where they were working were closed and many of them became unemployed. Lack of money led them back to their hometowns where they would feel safer. There were numerous institutions and individuals who helped them by distributing free food and essentials. Suspension of transport restricted them, but the desire to reach their homeland made them walk hundreds of kilometers. Some went on tuk- tuks, some in lorries full of people and others who could not afford it had to bicycle or walk home. Many lost their lives on the way.


Quarantine centers were not very popular among the migrant workers due to their bad reputation with respect to hygiene. After facing hunger, exhaustion and mental stress, they decided to return to their native places with their children. Measures were taken by the Government, both state and central. Special trains could run, intra and interstate bus services could resume. Food was distributed by the central government to people with ration cards, an advance payment of PM Kisan Samman Nidhi, Rs. 500 to four crore women with Jan Dhan Accounts was made. The Bihar Chief Minister also declared a minimum of Rs. 1000 to migrants coming into the state along with a 14-day compulsory quarantine for migrant workers.


The sudden exodus of migrant workers means unavailability of labor for many industries. Business units, export houses, supply units and the construction industry are heavily dependent on labor. For workers, not being able to work means unemployment, poverty, and a struggle for survival. Both ways it is a loss for the economy. ‘’People’s income has collapsed and there is immediate need to prevent destitution. There is immediate need to unlock the economy to prevent it from potential collapse”. (Rajat Nag).


Back home, informal workers have the option to get back to agriculture. ‘’We always point out how unproductive Indian agriculture is. A big chunk of agriculture economy is now coming back in a pretty decent way. If all the metrics are okay, it can become the base of the economy “(Ajit Pai). The Government has introduced several measures to boost agriculture and help it become more profitable and attractive. The ECA (Essential Commodities Act) has been recently amended which will deregulate stock holding limits to promote barrier free trade for farmers enabling farmers to get a better price for their crop. Despite the COVID-19 challenge, farming sector has shown a larger summer crop area and better prices. Fresh trends predict agriculture growing by 3% in 2020-21 despite the pandemic.


MGNREGA allocation has been increased by Rs. 40,000 crore to give employment security to people to come back to their native villages. The Government’s policy of opening of many sectors to private companies will create new employment opportunities for migrant workers. The Government has promised availability of housing on cheap rents and low-cost housing for all. Free ration, one nation-one-ration card and cash transfers are being done to provide them with immediate relief.


There was also a proposal for locating industries at the native places of workers, so that they do not have to migrate to cities. Adequate arrangements should be made so that they do not have to travel too far for work. In cities, quarters should be provided to house helps by their employers.


COVID-19 has made it necessary for all industries to follow the protocol of social distancing. Considering that our cities are already cluttered, it would make sense for people to stay in their native places as far as possible, as it gives them social and emotional security besides food security. The rural-urban ratio of the population should become more balanced for the sake of protecting the environment too. We should develop “Smart Villages” with modern facilities with the help of public-private-partnerships.


At present, industries in many places are facing acute shortage of labor. In New Delhi, infrastructure projects like flyovers and Delhi Metro Rail (phase 4) projects are suffering because of drop in strength of workforce by 50-75%. Several states like Gujarat, Haryana and Punjab are wooing workers to come back from their villages by offering higher wages and rail tickets so that manufacturing can be restarted. In Uttar Pradesh, 25 lakh migrants have returned, and the government is making a policy to rehabilitate them. India is caught between the dichotomy of sending migrant workers to their hometown versus retaining them in urban areas for businesses. Hopefully, an equilibrium will come about in the coming years.

Now is the time we should think of empowering informal workers for the long term. They need to be paid better wages and allowances; should get job security and they should be made aware of any potential hazards in their work. India has several labor laws for organized workers but insufficient laws to safeguard the interest of unorganized workers. Unorganized workers are not a part of social security laws. Absence of proper worker laws for informal workers weakens their bargaining power. There are talks about bringing workers in unorganized sector in the same ambit as the organized sector. During COVID 19 major labor laws were banned to help the industries survive the slowdown. The industries got more flexibility in hiring and firing employees, renegotiating their wages and other benefits. However, unorganized sector which was 90% of the workforce remained unaffected as they did not come under the purview of the act.


Informal workers have long been a neglected part of India’s human capital. The COVID 19 crisis is a glaring proof of this. Unorganized workers are a crucial component in the supply chain and their welfare must be ensured whether they are in their native place or in the cities. Rural development will ensure their economic stability in their villages and also prevent overcrowding of cities. For workers who shift to urban areas, minimum wages and social security measures should be prescribed by law like it is for organized workers. Only then can we build an ‘Atmanirbhar’ Bharat.


Sanjana Jain is a 2nd year B.Com(Hons.) student at JSBF. You can view her profile on LinkedIn.

Baljinder Sekhon is a 2nd year B.Com(Hons.) student at JSBF. You can view his profile on LinkedIn.

Shrey Agarwal is a 2nd year B.Com(Hons.) student at JSBF. You can view his profile on LinkedIn.


1. Ajay Chiber- ‘No more nibbling anymore’, Economic Times 21st May 2020


2. Pawan Goenka, ‘How to stimulate the stimulus’, Economic Times 21st May 2020


3. ‘Stop COVID-19 or save economy: Can India do both?’ Panel discussion, speaker Ajit Pai


4. ‘Stop COVID-19 or save economy: Can India do both?’ Panel Discussion speaker Rajat Nag


5. Zia Haq – ‘Farm sector defies COVID-19 gloom, to be key to recovery’, HT May 24, 2020


6. Financial Express –India needs large fiscal stimulus May 10, 2020


7. Arun Maira, ‘Need for reforms, the right reforms’, Economic Times 14th May 2020


8. Manoj Kohli, ‘A multisector road map for recovery’ Hindustan Times, 13th May 2020


9. P. Naveen, ‘Endless caravan of misery as migrants trudge home’, Times of India May 12th, 2020


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