The government needs to play the role of a guardian, and lead the way for collaborations from individuals and the private sector.
The government of Nepal, on Monday 23 March, announced a lockdown starting from Tuesday 24 March at 6 AM for a week up until 31 March 6 AM[1]. While the decision was welcomed by the general public, the low-wage earning workers are set to face the hardships. If the lockdown gets extended, which looks highly probable at the moment, these workers are set to face some serious challenges.
As per the Nepal Labor Force Survey 2017/18, around 62.2% of people are employed in the informal sector. Similarly, while an average Nepali employee earns NPR 17,809, a low-wage worker might either earn somewhere around the minimum monthly wage of NPR 13,450 or might earn a minimum daily allowance. As most of them will not be able to stock up food for more than a week, they’ll have no other alternative than to head for work. In such a scenario, they will not only risk getting themselves exposed to the coronavirus but also risk spreading it to others. Therefore, any further lockdown would be shattering for this segment. This is why it becomes very important for the government to intervene and support them.
At a time like this, the government could come up with various fiscal stimulus or economic packages that would help mitigate the damages caused by the lockdown. Globally, various countries have already begun with such packages. In the UK, the government announced that it will pay up to 80% of the workers’ wages for those who are unable to work due to the Covid-19 pandemic[2]. This amongst various other efforts came in a bid to help protect the workers’ jobs. Recently, the Indian government also announced a package worth INR 170,000 crores (NPR 272,000 crores) with the aim of providing a shield for the poor during the Covid-19 pandemic[3]. India’s package includes a mix of food security and direct cash transfers, which has a target of providing support for at least 800 million people. In addition, the government announced that families below the poverty line will get free cylinders for three months under the Ujjawala scheme whereas the wages under the MNREGA will be increased by INR 2,000 (NPR 3,200) per worker on an average to help daily wage workers.
In Nepal, there hasn’t been enough discussion in this sphere. In such a crisis, the initiation needs to come from the central government whereas there is also a need to mobilize the local level government. There are already some instances where the local level government themselves have taken the initiative. Tilottama municipality, recently, announced that they will not be taking any housing rental taxes for a month[4]. Along with this, they also announced that they will be distributing rice, pulses and salt to daily wage earning workers, for which they have identified 800 poor families. However, these kinds of initiations need to be launched elsewhere too. While some people have already lost their jobs, the daily wage earning workers can’t do any business during the lockdown. For this, the government can either establish a separate workers’ relief fund or can work through existing funds to help them. These funds can be used to provide various relief packages to the segment or even bridging loans for the companies to help them pay their employees their salaries. On the other hand, the local level government should take the lead to collect the information of the low-wage workers. Since the government, previously, had also collected information with regards to the unemployed population for the Prime Minister Employment Program (PMEP) at the local level; it can be used to further supplement the information. Likewise, the government can also get information from the private sector. Construction companies and other manufacturing units who employ workers might be able to help identify the low wage workers.
At a time like this, the call of the hour is to give relief to the hardships of the low-wage workers. While businesses related to the travel and tourism sectors are the hardest hit, the unorganized sector is equally burdened. Due to this, the government needs to play the role of a guardian, and lead the way for collaborations from individuals and the private sector. There is a dire need of a collective effort which is the only way we can mitigate the challenges and ensure the well-being of all.
References:
[1] “Nepal goes into lockdown for a week.” Nepali Times, March 23, 2020. Retrieved from Nepali times: https://www.nepalitimes.com/banner/nepal-goes-into-lockdown-for-a-week/
[2] Osborne, Hilary. “Coronavirus benefits, sick pay and lost hours: your rights in the UK.” The Guardian, March 24, 2020. Retrieved from the guardian: https://www.theguardian.com/society/2020/mar/24/coronavirus-benefits-sick-pay-and-lost-hours-your-rights-in-the-uk
[3] “Coronavirus: FM Sitharaman announces package worth Rs 1,70,000 crore for poor, daily wagers.” India Today, March 26, 2020. Retrieved from India today: https://www.indiatoday.in/business/story/finance-minister-nirmala-sitharaman-live-updates-economic-relief-package-india-coronavirus-1659912-2020-03-26
[4] Sharma, Topraj. “One-month housing rental tax exemption in Tilottama.” OnlineKhabar, March 23, 2020. Retrieved from onlinekhabar: https://www.onlinekhabar.com/2020/03/846866?fbclid=IwAR0tLxU3pYfZoa7wIOysM2dyR3B3Mn3BBCZ3YxRlCXkkJRBU0dXrXnbXWDI
Ishan Bista is an MPA candidate with a concentration in Economic and Financial Policy at Cornell University. He previously graduated with a BBA degree from Kathmandu College of Management, Siam University with a major in Marketing and Branding. His keen interest and aspirations lie in the area of public policy and economics. He previously worked as a research fellow for Nepal Economic Forum.