Labour, Livelihoods, and Employment in the 2021–22 Union Budget

Coming in the midst of the immense damage inflicted on the Indian economy by the COVID-19 pandemic, the 2021–22 Union Budget needed to perform the unenviable task of compensating households for massive livelihood losses as well as stimulating economic growth while maintaining some fiscal discipline. As it turned out, the government chose to focus on the second and third goals and largely ignored the first.

Before delving into the budget’s provisions on labour, it is useful to take stock of what we know of the pandemic’s impact on employment and incomes. Here I draw on our own survey (the Azim Premji University Covid-19 Livelihoods Survey) as well as other purposive COVID-19 impact surveys,¹ in addition to our work based on nationally representative data from the Consumer Pyramids Surveys of the Centre for Monitoring Indian Economy (CMIE).²

Many surveys investigating the COVID-19 impact on vulnerable workers, including ours, have shown that around 60%–80% of workers (self-employed, casual as well as salaried workers without job security) lost employment during the lockdown in April and May 2020. The CMIE data show that the lockdown affected around 43% of the national workforce. Even as late as December 2020, both CMIE data and our survey showed that 20% of those who lost work during the lockdown were unemployed (Abraham and Basole 2021; Nath et al 2021). Women and younger workers were much more likely to lose their jobs and less likely to recover (Abraham et al 2021). There was also an increase in informality during this period, with previously salaried workers returning to the labour market as self-employed or casual workers (Abraham and Basole 2021).