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An Analysis of Rural Shocks in India during the Pandemic
Utilising the third round of World Bank Survey data collected during September 2020, the employment shocks in rural India are analysed based on the gender, age, caste, and income quartile of individuals. Using graphical representations and simple mean tests, it is found that, on average, females in rural areas did not have an occupation relative to males in most of the states that feature in the survey. Older females and Scheduled Castes, Scheduled Tribes, and Other Backward Classes show a lower probability of retaining regular salaried jobs during the lockdown and were adversely affected owing to disruptions in daily wage work.
The industrial employment in India as a per cent of total employment had stagnated around 24% for the entire decade of 2010. Industrial employment in China had reached 30% in 2012 and 2013, but fell to 27.42% in 2019. In terms of the absolute number of job creation and availability, even the slightly higher percentage implies millions of additional workers in the industrial sector. Furthermore, the service sector employment in China has steadily risen to 47.25% in 2019, while that in India has remained around 32.28% in 2019. Apparently, this comparison is not necessary while trying to understand the impact of COVID-19 on the conditions of rural workers either in India or China, which is the main purpose of this article. Yet, a brief background should be useful to reflect on where the employment levels in these two growth-wise comparable countries stood just before COVID-19 affected economic activities substantially.
A further justification to this generalised comparison comes from the fact that none of the developing countries have well-designed unemployment insurance schemes, which economic shocks such as those that are brought over by the pandemic exposes as major institutional weaknesses. Agricultural, farm and non-farm employment often provides rural insurance to large masses in developing countries. For India, that too has dropped 7 percentage points between 2011 and 2020, while it also fell to 25% for China. But this has been probably more than compensated for by the rise in service sector jobs. Under these circumstances, countries with higher and diverse employment-generating capacities shall turn out to be more resilient to economic shocks. Additionally, the pandemic and the lockdown made the informal labour force of India, suffering over decades of job insecurity, low earnings, lack of social protection, and dependence on daily wages, even more vulnerable (ILO 2020; Chen 2012; State of Working India 2020). How did India do during the first two phases of the pandemic in terms of jobs and rehabilitation for displaced workers?
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