The prolonged nationwide lockdown announced to contain the spread of COVID-19 has had a pernicious impact on the lives of low-income households. These are the households that got hit the hardest because they generally work in informal sectors with irregular sources of income and inadequate means of safeguarding themselves during times of shocks such as COVID-19. Moreover, heavy restrictions imposed on mobility have made it even more difficult for people to find work.
In this context, it is important to understand the magnitude of distress faced by households during this lockdown. To study these effects, we conducted a fortnightly survey along with 12 Microfinance Institutions (MFIs) in 9 states to answer the following broad questions:
- What are the visible signs of distress faced by households?
- Do households have access to essential services, especially banking? Are they able to avail the benefits of Government welfare schemes?
- What are the methods adopted by distressed households to cope with this situation?
Facing a loss of employment and reduction in earnings, households often rely on Government welfare schemes for sustenance. Though the Government has extended support in terms of various cash and in-kind transfer schemes, households face exclusion at various levels while trying to acquire these benefits. Adding to this misery is the lack of sufficient access to basic infrastructures such as Common Service Centers, health services, and banking services. Having a dearth of options, households end up cutting back on essential expenditure such as food and healthcare and take loans, mainly from informal sources to make ends meet. Though restrictions on mobility have been eased significantly from the first phase of the lockdown, their impact is likely to continue in the medium to long-term.
To study these effects in detail and to measure the intensity of impact of the lockdown, we also try to collate evidence from surveys by other organizations that are studying a similar set of questions.
This is an ongoing study, currently in its round 2, and we will continue to update the research brief as more evidence comes in.