A coronavirus lockdown in India – due to end on Tuesday but set to be extended – has left hundreds of millions of informal workers without cash or food, and fearful that lacking paperwork or a bank account will hinder their access to government assistance.
Many families will instead resort to taking out loans at high interest rates in order to survive, while others will fall deeper into debt and end up trapped in bonded labour – India’s most prevalent form of modern slavery – according to activists.
India identified at least 135,000 bonded workers in its 2011 census, while the Australian charity Walk Free Foundation put the number at eight million in its 2018 Global Slavery Index.
“The only capital they (internal migrant workers) have is their labour and the only people they know how to negotiate their livelihood with is the middleman,” said Rudra Pattanaik, chairperson for the migrant labourer welfare charity PARDA.
“Cash flow in a migrant worker’s home rotates around loans and working to repay them and that process has been completely derailed,” he added. “The money lenders and middlemen are definitely going to recover the money, by hook or by crook.”
In a survey of about 3,200 informal workers who were walking home last week from cities to their villages, nearly a third had loans to repay – mainly to money lenders from their communities.
Almost half of those who were in debt said they feared their inability to service the loans could see them subjected to some form of violence, according to the survey by charity Jan Sahas.
In Odisha, charities are using short videos inspired by the animated film “Madagascar” to inform villagers about coronavirus and warn them against taking out loans from local money lenders at high interest rates – a practice known to fuel slave labour.
The Indian government says at least 300,000 people have been pulled out of slavery since 1976, and it has committed to rescue and rehabilitate more than 10 million bonded labourers by 2030.
Yet such efforts could be set back as people turn to the most convenient source of cash – lenders their families have known for generations – despite aid promised by the government for the country’s poorest, according to labour rights activists.
“Money lenders may increase interest rates … distress migration will increase,” said Binoy Peter, executive director of Centre for Migration and Inclusive Development, a non-profit.
“It is going to be a catastrophe.”
A labour ministry official, who declined to be identified as he was not authorised to speak to the media, said government guidelines for employers to not deduct wages or terminate employment should prevent workers needing to take out loans.
The official did not comment on those who had already taken out loans, and said there were no government directives to examine the issue of debt bondage during or after the lockdown.
India – which has at least 9,000 confirmed cases of the virus and more than 300 deaths – has pledged US$23 billion to provide food and cash to millions of its poorest citizens, along with US$4 billion from a welfare fund for construction workers. (Source: Thomson Reuters Foundation)