Rural unemployment rate, which used to hover around 6% before the pandemic, rose to 8.75% in June, according to the Mumbai-based Centre for Monitoring Indian Economy (CMIE). India’s gross domestic product fell by a record 7.3% in the year that ended on March 31. The government has forecast 10.5% growth for 2021/2022 but a second wave of the pandemic has dented expectations and several economists have cut their forecasts. The poor have especially been hit hard.
The Reuters investigation showed most of the 75 households in the Uttar Pradesh cluster, a combined 518 people, have taken out total debt of 6.12 million rupees ($82,250), more than 80% of which remains unserviced, the householders said. Borrowing has risen by three times since the pandemic hit in March 2020 and about half of that was taken out the past six months, the survey found. With no jobs or with bread-winners sick, the cumulative monthly income of the 75 households has dropped to about 220,000 rupees ($2,960) from 815,000 rupees ($10,960) before the pandemic. “Almost everyone is in debt in this village … unemployment is the biggest problem,” said by villagers ,
Prime Minister Narendra Modi’s government has promised free foodgrains for the poor but the rations are limited and not enough for the family. The coronavirus and a lockdown aimed at stopping it last year saw millions of people thrown out of jobs in cities and towns and forced back to their villages, and ever higher levels of debt. Interviews with 75 households in a cluster of eight villages in India’s most populous state showed household incomes have slumped nearly 75% on average. Almost two thirds of the households have taken on debt.