Economic Impact of COVID-19-induced Lockdown on Rural Households

The COVID-19 pandemic had unleashed a massive devastation across the world. It caused widespread loss of lives and brought the economy to a standstill, affecting the livelihoods of the masses. In India, the government imposed a nationwide lockdown from 24 March 2020, bringing a range of strict restrictions to control the spread of the virus. The lockdown was lifted in a series of unlock phases by 30 June 2020. The lockdown disrupted the lives of millions of households across the country, with its effects lingering months after the lockdown ended. In rural areas, many households slipped in and out of poverty, facing food insecurity and having no source of income. The return of migrant workers back to their rural homes worsened the scenario.

The analysis of the survey data (World Bank 2020a) reveals how widespread and severe some of these impacts¹ were in the six states of Jharkhand, Andhra Pradesh (AP), Rajasthan, Bihar, Uttar Pradesh (UP), and Madhya Pra­desh (MP). The survey covered nearly 5,000 rural households across each of the three rounds of which 1,068 households were surveyed across all rounds. The ­estimates² are reasonably indicative of the trends which existed during and ­after the months of the lockdown for the rural population of each of the six states. Overall, we find that consumption and employment were severely affected with a slight recovery by September 2020. We also see that a large share of the mig­rants was still back at their rural homes, three months after the lockdown restrictions were removed. As for access to ­relief to programmes by the households, we see self-help groups (SHGs) being involved in some relief activities as well as good coverage by the public distribution system (PDS) in providing relief support in the form of free food items supplied from ration shops.