Author : Niranjan Sahoo

Expert Speak India Matters
Published on Sep 03, 2020
Covid19 and India’s informal workers: A scrutiny of State Response  When India imposed one of the stringent lockdowns on 24 March to fight a rapidly spreading pandemic, a key concern for the governments and other stakeholders was the safety and well-being of informal workers. According to various estimates, over 90 percent of India’s workforce is informal. This workforce that earns meagre wages for labour-intensive activities carried out without formal contracts, finds itself without any social insurance and broadly outside the ambit of regulation. Given their vulnerabilities, this section has been at the receiving end of an unprecedented crisis with Covid-19 triggered job loss and other related disruptions. According to  Centre for Monitoring Indian Economy (CMIE) report, as much as 75 percent of the 122 million Indians who lost their jobs in April are small traders and daily wage-labourers. Thus, the informal migrant workers are worse hit by a prolonged pandemic. 

States response so far

After two days of national lockdown, India’s Finance Minister announced an immediate 1.7 lakh crore economic package under Prime Minister Garib Kalyan Yojana (PMGKY) to provide free food (through Prime Minister Garib Kalyan Anna Yojana  or PMGKAY) and cash transfer support for the most vulnerable citizens facing the pandemic. Under PMGKY, cash transfers included Rs.1000 to be provided to nearly 3 crore poor pensioners, widows and disabled and a Rs 500 monthly deposit to be made to 20 crore women holding Jan Dhan accounts - both for a period of 3 months. Anna Yojana or PMGKAY, acting in concert with the Public Distribution System (PDS), targeted to provide food rations free of cost to 80 crore beneficiaries registered under the National Food Security Act (NFSA). The Union government also increased the wages under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) from Rs 182 to Rs 202. On June 30, Prime Minister Narendra Modi extended PMGKY benefits until November costing government an additional Rs 90,000 crore.  This article attempts to review the working of two important schemes viz: PMGKAY and MGNREGA in meeting the needs of informal workers. 

Prime Minister Garib Kalyan Anna Yojana (PMGKAY)

As mentioned earlier, PMGKAY beneficiaries are entitled to receive 5kg of rice/wheat per person and 1kg of pulses per household (as per new notification on 30 June). Keeping in mind the domicile-based nature of the entitlement, a special provision has been announced for migrants under the Atmanirbhar Bharat package which has allocated 8 lakh metric tonnes (LMT) food grains for estimated 8 crore migrants and their families who are not registered under the NFSA or state PDS. The government also approved 39,000 MT of pulses for 1.96 crore migrant families. What is the experience so far? Are targeted populations accessing the benefits under PMGKAY? According to  Food Corporation of India (FCI) reports, food entitlements under the central scheme have reached  as many as 750 million beneficiaries during April-June. Of the total allocation of 121 LMT that was made for April-June, 118 LMT was reportedly lifted by states and Union Territories (UTs). Of the special allocation for migrant families, states/UTs combined lifted 6.39 LMT of food grains and distributed 38 percent of that among 2.51 crore beneficiaries as of June. However, ground reports of their execution provide a different picture. As of a June report, the access to the PMGKAY free entitlement since April had only been secured after the purchase of the stipulated monthly quota of  7kg under subsidised prices from ration shops. Additionally, as per a June 29 press release of the Ministry of Consumer Affairs, Food and Public Distribution, 23.1 crore beneficiaries were yet to receive June’s 5kg worth of food grains. With passage of time, many would have thought the utilization and implementation records of this critical scheme would improve. The latest figures on 31 August indicate the persistence of same problems. The Ministry of Consumer Affairs, Food and Public Distribution report shows that only 33 percent of free food grains and 56 percent of free gram (whole) for migrants under the Atma Nirbhar Bharat package have reached the targeted beneficiaries. Similarly, of the 8 lakh tonnes of food grains earmarked for the migrant workers, 6.38 lakh tonnes (80 percent) was lifted by the states and UT, but only 2.64 lakh tonnes (33 percent) have been distributed among the targeted beneficiaries in the last four months. The ministry data shows that while some states like Andhra Pradesh lifted 100 percent of their quota, there is nil distribution. States like Telangana and Goa have reportedly distributed 1 percent and 3 percent respectively. While many states are lagging in terms of implementation, one factor in this sorry state is the low level of awareness about these benefits among migrant populations. A number of ground reports have come up in recent months on this. For instance, Jan Sahas report on lockdown impact revealed that of the 3,196 respondents, 62 percent were not aware of available welfare measures including schemes like PMGKAY and as many as 37 percent did not know how to access them. Another survey found that a large sections of migrant population lack of necessary documents to access these benefits and Covid-19 related restrictions have only made such access even more difficult. While the Union government launched inter-state portability of ration cards in June, it is still a work in progress. In short, despite many excellent provisions and tailor-made handouts under PMGKAY, its realization is a huge challenge.  Issues such as limited state capacity and federal glitches especially from the states are rendering this useful scheme ineffective. 

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 

While PMGKAY is struggling at the moment, the time-tested job scheme or MGNREGA has come as a big relief for millions of migrant workers who returned to their villages in most desperate conditions. As said earlier, the Union government pumped an additional Rs. 40,000 crore to the existing budget allocation for 2020-21 taking it to Rs 1,01,500 crore. Further, wage rate was enhanced from Rs 182 to Rs 202. MGNREGA which acts like social protection by providing 100 days’ work to a member of rural household has generated unprecedented demand in the last five months. To illustrate, a record number of 175.97 crore person days has been created during the last five months. In a desperate bid for survival, return migrants have steadily turned to the scheme and the job demand has witnessed an unprecedented rise with states like Uttar Pradesh (UP) (57.13 lakh workers), Rajasthan (53.45 lakh workers) and Andhra Pradesh  (36 lakh workers) leading the trend. Reports claim that in at least 26 states, more households have demanded work in the first 25 days of June alone than the average of the past seven years (2013-14 to 2019-20). However, there are glitches in this too especially meeting the work demand.  As per recent data,  27.78 lakh households in 31 districts of UP availed work in May this year as compared to 6.71 lakh households in the same month last year. The challenge is that there are no work days left in the state quota for coming months. Similar situation is faced in other states such as Chhattisgarh, Bihar, Odisha, Jharkhand, West Bengal among others. The Union government is yet to take a call on this issue. Second issue about MGNREGA is that while the scheme has come as big relief in the time of crisis, its major drawback is it is meant for unskilled workers. The diversification of the scheme is a far cry to which not many governments have paid serious attention. Its scope can easily spread to agriculture, dairy, poultry, horticulture, vegetable cultivation and others allied rural activities, even skill training.


A quick review of two major central schemes to address the woes of informal sector labour particularly the migrant workers indicates a mixed record. While PMGKAY and its expansion is well intentioned, its implementation has been patchy. This has largely due to limited state capacity and federal woes as states are the main actors in execution. An active involvement of civil society organizations as in the case of Kerala is something worth a serious consideration to address the teething troubles. Whereas, MGNREGA has come out as bright spot in meeting immediate needs of migrant workers. While the extra allocation of money for the scheme has come as big relief generating millions of person days in some of the worse hit states, most states have exhausted their 100 days quota and no money left. Despite many flaws and issues of real value additions that the scheme is making to economy, it makes sense to increase the workday limit as an exception to face the pandemic related job crisis.
Megha Biswas is an intern with ORF
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Niranjan Sahoo

Niranjan Sahoo

Niranjan Sahoo, PhD, is a Senior Fellow with ORF’s Governance and Politics Initiative. With years of expertise in governance and public policy, he now anchors ...

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