A blockade to control India’s Covid-19 epidemic could push 12 million people into extreme poverty.
According to Bloomberg, after being forced out of school, Abdul Kareem made a living by doing some odd jobs like bicycle repair. After that, he moved to a small truck to help his family out of poverty.
For Abdul Kareem, this work is a stepping stone to help the whole family have a better life. But his dream shattered when the Covid-19 epidemic devastated the Indian economy. Kareem lost his job and was trapped in the northern village of Uttar Pradesh with his wife and two children.
Their meager savings soon exhausted. He doesn’t even have money to buy books and school uniforms for his children.
“I knew nothing about the job situation in Delhi when we returned. I will do anything to prevent my family from starving ”, Kareem lamented.
According to the World Bank, at least 49 million people worldwide will be in extreme poverty with a living standard below US $ 1.9 a day due to the impact of the pandemic. Among them, India alone has 12 million people.
“Not dead from viruses but dead from starvation”
According to estimates by the Indian Center for Economic Monitoring (CMIE), about 122 million Indian citizens were forced to quit their jobs last month. Freelance workers receive daily wages or work for small businesses that are hardest hit.
The economy slipping due to the impact of the disease also creates a great political risk for Indian Prime Minister Narendra Modi. Modi was re-elected last year mainly because of social programs aimed at the poor, including the supply of gas cylinders, electricity and public housing.
This new economic injury will put pressure on the Indian government as it seeks to steer the economy back on track.
“Most of the Indian government’s poverty reduction efforts over the years have been able to evaporate in a matter of months. Many people will die from starvation due to viruses, ”Bloomberg quoted Mr. Ashwajit Singh, IPE Global CEO.
A UN University study estimates that 104 million Indians will fall to poverty, a standard of living of just $ 3.2 a day. This will bring the poverty rate in this country from 60%, equivalent to 812 million people, to 68%, equivalent to 920 million people.
A World Bank report shows that India has made significant progress and is almost out of its state with the poorest people. However, the effect of the blockade is likely to wipe out this achievement.
After the above report, India’s situation became increasingly gloomy. The Rustandy Social Area Innovation Center at the University of Chicago School of Business analyzed unemployment data from CMIE through a survey of about 5,800 households in 27 states in India.
Experts found that rural areas were hardest hit by the blockade. More than 80% of Indian households have reduced income and no more food without aid.
The Indian government promises farmers low-interest loans, giving money directly to the poor and helping them access food security programs. However, many of the poorest people do not have records and receive no assistance.
The situation of food security in India has worsened with millions of poor people across the country. Images of poor people with rotting fruit and eating leaves have been widely published in various media.
The Covid-19 epidemic caused India’s economic growth to drop to its lowest level in more than a decade. The blockade order, which began on March 25, stagnated economic activities, pushing the economy to the brink of weakness for the first time in over 40 years.
According to data from Johns Hopkins University, India is currently an Asian virus hot spot with the number of infections exceeding 151,000 people.
Modi announced that the government would spend US $ 265 billion, or about 10% of GDP, to help Asia’s third economy overcome the crisis. However, experts comment that only a small part of the stimulus package is direct fiscal stimulus. This is not enough to compensate for economic losses during the blockade.
“What is particularly worrying is the reaction of the Indian government. “The epidemic will deepen inequality deep in India,” said Bloomberg economist professor Reetika Khera at the Indian Institute of Technology.
Economic measures will not be effective immediately. The industry may struggle to restart because of a labor shortage.
“There are no factories or industries, only hills here,” said Surendra Hadia Damor, a hopeless, hopeless worker. He traveled almost 100 km from Ahmedabad, Gujarat, before a volunteer organization took him back to the village.
“We can only survive a month or two before we find another job recently,” he added.