Impact of COVID-19 on Rural Economy in India

Abstract

‘They will go to die there, where there is life ’. COVID-19 lockdown flooded streets with migrant labourers which were marching to their villages to find warmth and empathy. Many reached their homes but several failed and died on streets and railway tracks. The current study offers insights on the plight of migrant labourers and impact of COVID-19 on rural economy in India. The major finding of the study suggests 400 million workers in India in the informal economy are at the risk of falling deeper into poverty during the crisis. The low reporting of COVID-19 cases due to low testing will result in community spread. The reverse migration will create excess pressure on the agriculture and rural economy which will result in a significant number of people to fall into abject poverty. COVID-19 will have both short and long-run effect on the rural economy in India. The government economic package contains majorly long-term measures whereas short-term measures such as cash incentive and wage subsidy should be given to save migrant labourer and marginal farmers. Above all, mass corruption in the system is the biggest challenge in the effective implementation of plans.

Keywords: COVID-19, Migrant Labourers, Agriculture, Rural Economy, India

JEL Classification: J61, P25