Indians Prefer Job Guarantee Over Cash Handouts, LSE Study Says

(Bloomberg) -- A majority of urban Indians left unemployed by the coronavirus pandemic want the government to guarantee them jobs like it does for people in rural areas, says a study by the London School of Economics.

An overwhelming 82% of respondents surveyed for the report ‘City of dreams no more, a year on: worklessness and active labour market policies in urban India' favored job guarantees followed by 16% for cash transfers.

Even most of those who had received cash handouts from the government in the wake of the pandemic preferred having job protection over financial assistance, wrote Swati Dhingra and Fjolla Kondirolli, the authors of the report.

The federal government currently guarantees at least 100 days of employment in a financial year to every household in rural areas. Budget allocation for the program was stepped up last year amid the pandemic, and authorities reported as much as a 50% increase in enrollment for the program.

The study recontacted respondents in India covered in an earlier survey following the first wave of the pandemic. Unlike last year when Prime Minister Narendra Modi imposed a sweeping nationwide lockdown to stop the virus's spread, movement curbs this time around were localized with limited economic fallout.

Read: Local Lockdowns Temper India's Economic Activity in April

Still, the study found 40% of recontacted workers had no work or pay, 10 months on from the first lockdown months.

“Younger individuals, in the bottom half of pre-Covid earnings, experienced higher levels of worklessness,” the authors wrote, based on responses from 4,763 individuals between January and March this year in three lower-income states of Bihar, Jharkhand and Uttar Pradesh.

Some other findings of the survey are:

Urban individuals have been unemployed for the last six months on average
The share of employed individuals who had a full year's work has halved since the previous year and they have seen an average reduction of six working hours per week
Government programmes such as state insurance are barely reaching low-income urban areas
Less than 1% of the respondents had access to these government benefits