NSSO Survey Reveals COVID-19’s Second Wave:-
In the aftermath of COVID-19’s second wave, the National Sample Survey Office (NSSO) conducted a comprehensive survey to evaluate the pandemic’s impact on India’s informal economy. The findings were stark and disheartening, highlighting the severe economic disruption experienced by millions of workers and small businesses that form the backbone of India’s economy.
The Informal Economy: A Vital Yet Vulnerable Sector
India’s informal economy comprises a significant portion of the workforce, with estimates suggesting that it employs around 80-90% of the total labor force. This sector includes daily wage laborers, small traders, street vendors, domestic workers, and others who operate outside the formal regulatory framework. Unlike their counterparts in the formal sector, informal workers lack job security, social security benefits, and access to financial safety nets, making them particularly vulnerable to economic shocks. 
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Impact of the Second Wave
The second wave of COVID-19, which peaked in April and May 2021, was far more lethal and widespread than the first. Despite the absence of a nationwide lockdown, localized restrictions and curfews across states disrupted economic activities severely. The NSSO survey revealed that these measures had a catastrophic impact on the informal economy, exacerbating poverty and joblessness among already marginalized groups.
Employment and Income Losses
The survey found that unemployment rates surged dramatically during the second wave. Informal workers, who typically earn their livelihood through daily wages, were hit hardest. The Centre for Monitoring Indian Economy (CMIE) reported that around 10 million jobs were lost during this period, with the informal sector bearing the brunt of these losses.
Incomes also plummeted as economic activities came to a halt. Many informal workers reported a complete loss of income for several weeks, while others experienced significant reductions. This loss of income forced households to dip into their savings or take on debt, further straining their financial stability.
Healthcare Expenditure and Savings Depletion
One of the most significant findings of the NSSO survey was the increase in healthcare-related expenses among informal workers. The high cost of medical treatment, coupled with the loss of income, drained household savings. The survey indicated that nearly 97% of households had to reduce their savings to cover daily expenses and medical bills during the second wave). 
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Gender Disparities
The impact of the second wave was not uniform across all sections of society. The survey highlighted that women in the informal economy were disproportionately affected. Many women, especially those employed as domestic workers or in small-scale industries, lost their jobs and faced increased household responsibilities. The pandemic exacerbated existing gender inequalities, pushing many women deeper into poverty .
Government Response and Relief Measures
During the first wave, the Indian government announced several relief packages aimed at supporting the informal sector. These included direct cash transfers, food distribution schemes, and employment guarantees under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). However, the second wave saw fewer such interventions. The NSSO survey pointed out that the limited and uneven reach of government relief efforts during the second wave failed to provide adequate support to those in need.
Many informal workers relied on community support and non-governmental organizations to survive the economic downturn. Membership-based organizations (MBOs) played a crucial role in providing financial aid, food supplies, and healthcare support to informal workers, filling the gaps left by government programs .
Long-Term Implications
The findings of the NSSO survey suggest that the impact of the second wave will have long-term repercussions for the informal economy. The economic disruption has not only led to immediate job and income losses but also eroded the resilience of informal workers to future shocks. The depletion of savings and accumulation of debt mean that many households will struggle to recover even as the economy begins to reopen.
Additionally, the decline in consumer demand due to lower disposable incomes and increased financial uncertainty poses a significant challenge for economic recovery. Informal workers, who are often at the lower end of the economic spectrum, will likely be hesitant to spend, further slowing down the recovery process.
Policy Recommendations
To mitigate the long-term impact and support recovery, the NSSO survey emphasizes the need for targeted policy interventions:
- Enhanced Social Protection: Expanding social security benefits to cover informal workers can provide a safety net during economic downturns. This could include unemployment benefits, health insurance, and pension schemes.
- Financial Inclusion: Improving access to financial services for informal workers can help them manage their savings and access credit during emergencies. Initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY) can be strengthened to ensure broader coverage.
- Skill Development: Investing in skill development and training programs can help informal workers transition to more secure and better-paying jobs. This can also boost productivity and economic growth in the long run.
- Support for Women Workers: Special focus should be given to supporting women in the informal economy. This could include childcare support, flexible work arrangements, and targeted financial aid to help them balance work and household responsibilities.
- Strengthening MBOs: Recognizing the role of membership-based organizations in supporting informal workers, the government can partner with these organizations to deliver relief measures and support services more effectively.
- Healthcare Infrastructure: Improving healthcare infrastructure and making healthcare more affordable can reduce the financial burden on informal workers during health crises. Expanding the reach of schemes like the Ayushman Bharat can be beneficial.
Conclusion
The NSSO survey’s findings underscore the critical need for a comprehensive and inclusive approach to economic recovery. The second wave of COVID-19 has laid bare the vulnerabilities of India’s informal economy, highlighting the urgent need for robust social protection systems and targeted policy interventions. As India navigates the path to recovery, ensuring the well-being and resilience of its informal workers will be crucial for sustainable and equitable economic growth. ALSO READ:- G7 Leaders Pledge Unwavering Support to Ukraine: “As Long As It Takes”2024