Coronavirus: Lalitha, 1 of 260 million Indians sliding back into poverty
- It took 10 years for India to lift more than a quarter of a billion people out of poverty. Thanks in part to the coronavirus, a similar number are falling back
- About 122 million Indians have been forced out of jobs since the country began its strict lockdown
Lalitha was returning to her native village in the southern Indian state of Andhra Pradesh, after she and her husband lost their jobs as construction workers.
“I cannot believe this is all we have left after five years of living in the city,” she said. “When we came here, we had 120,000 rupees (US$1,500) in the bank.”
Lalitha sees her experience as a riches to rags story. “Living in Mumbai was a mounting expense for us,” she explained. While the couple felt well off, most of what they earned was spent. Every month they sent money home, to the village where her children live with her parents.
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“You cannot see the peak, it’s been pushed further in time,” Bhramar Mukherjee, a professor of biostatistics at the University of Michigan who is part of a team modelling India’s pandemic, told Bloomberg.
She said she removed longer term projections from the team’s website because they were causing people to panic.
“I wish I could be more positive but I think it’s going to be really hard over the next couple of months.” While the country of 1.3 billion tried to impose a lockdown at a relatively early stage of its detected outbreak, this pushed India towards its first full-year economic contraction in over four decades as it rendered millions jobless.
Earlier this month, the Narendra Modi-led government eased restrictions but already, the country’s work in the decade leading up to 2017, when some 200 million people were lifted out of poverty, is being undone.
As for many others, the problems facing Lalitha and her husband did not begin with the coronavirus. She traces back their woes to the government’s decision to suddenly declare 86 per cent of the country’s currency illegal tender in November 2016.
This demonetisation move was meant to weed out hidden, untaxed wealth but it sparked a cash crunch and made it tough for Lalitha and her husband to secure stable jobs.
Ever since then, they have needed to dip into their savings regularly to survive. During the first 50 days of demonetisation, 40 per cent of jobs in the unorganised work sector were lost, according to a December 2016 study.
About 122 million Indians have been forced out of jobs since the country began its strict lockdown on March 24, according to estimates from the Centre for Monitoring Indian Economy, a private sector think tank, and analysts believe this situation could get worse.
For Lalitha, it is a cruel reversal of fortunes. Her family had done well in the decade leading up to the demonetisation debacle, ensuring enough paddy grew in their farms to sustain their family for a year and have a substantial amount left over to sell. She and her husband earned a combined 11,000 rupees (US$145) every month through their work in Mumbai, in addition to the 90,000 rupees (US$1,200) the family made annually through farm sales.
Now, her family stands not only to lose the 11,000 rupees but Lalitha fears she may have to sell some of the family’s land too.
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Rural economies have fared particularly badly, with 88 per cent of households seeing a significant fall in income during the lockdown period, according to a report by the Rustandy Centre for Social Sector Innovation at the University of Chicago Booth School of Business.
Lalitha’s children had begun attending private schools in their village; now they may have to go back to government schools.
While the government has provided an economic relief package, critics say it is woefully insufficient, with respected economists such as Raghuram Rajan and Nobel laureate Abhijit Banerjee taking the same position.
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In an article the economists co-wrote, they said “the biggest worry right now, by far, is that a huge number of people will be pushed into dire poverty or even starvation by the combination of the loss of their livelihoods and interruptions in the standard delivery mechanisms.”
But despite the loss of work opportunities, Lalitha says she is not bitter but instead looked forward to returning to her village where she would feel more secure.
“Mumbai was where I made money, that’s all. It is not my home,” she said, before picking up her bag and boarding her train.
Additional reporting by Bloomberg. This article has been amended to add the source for the estimate that 260 million Indians are expected to fall into poverty.
