Over 80% of Indian Homes Lost Income in Lockdown, Study Says
Day labourers sit waiting in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Over 80% of Indian Homes Lost Income in Lockdown, Study Says

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(Bloomberg) -- About 84% of Indian households saw their incomes fall last month under the world’s strictest shelter-at-home rules, and many won’t survive much longer without assistance, a study shows.

The Chicago Booth’s Rustandy Center for Social Sector Innovation analyzed data from the Center for Monitoring Indian Economy Pvt., collected through surveys covering about 5,800 homes across 27 Indian states in April. The researchers found that rural areas were hit the hardest and the spread of the coronavirus had little to do with the economic misery.

“Rather, income per-capita before the lockdown, lockdown severity, and the effectiveness of the delivery of aid are likely contributors,” they wrote.

The findings are in line with previous data from the CMIE and others, which showed that more than 100 million Indians have lost their jobs since March 25, when Prime Minister Narendra Modi stopped the production and sale of all but the most essential goods and services to contain the spread of the virus. His government on Thursday offered cheap loans and free food to farmers and workers in India’s vast informal sector to ease the pain.

Read more: India Offers $32 Billion of Cheap Credit to Farmers, Workers (1)

Both Hindus and Muslims -- the two largest religious groups in the nation of 1.3 billion people -- were equally impacted by the lockdown, and the worst-hit states were Tripura, Chhattisgarh, Bihar, Jharkhand, and Haryana. The study’s authors are Marianne Bertrand, professor of economics at the University of Chicago Booth School of Business, Kaushik Krishnan, chief economist at CMIE, and Heather Schofield, an assistant professor at the Perelman School of Medicine and the Wharton School.

Most worryingly, they found that 34% of all households reported being able to survive for no more than one week without additional assistance.

Proportion of households reporting income loss:
  • About 84% of households with incomes of as much as 3,801 rupees ($50)
  • About 92% earning between 3801 rupees to 5,914 rupees
  • About 93% earning between 5,914 rupees to 8,142 rupees
  • About 85% earning between 8,142 rupees and 12,374 rupees
  • About 66% earning between 12,374 rupees and 101,902 rupees

The highest earners saw the lowest declines probably because they hold “stable, salaried jobs, with the ability to work from home and continue to earn a living,” according to the report. The smallest earners perhaps have occupations that continued despite the lockdown -- such as farming, or food vendors -- the authors said.

“The remaining households appear to be exposed to substantial job losses that have not been buffered by additional transfers,” they added.

©2020 Bloomberg L.P.

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