COVID impact: Lockdown sinks Tamil Nadu’s rural workers deep into debt

As I complete my long discussion with Muthukumar, he politely asks if he can ask me a question. 

“Please do,” I say and he asks: “Sir, I had mortgaged my wife’s jewels with a private lender only recently. Now I have no job. Will they give me any loan waiver, for I cannot pay the dues?” 

His question comes from the deep-seated fear that he will not be able to repay the loan if the interest mounts. His monthly due is ₹14,000 on a ₹1,20,000 loan. 

Muthukumar and his wife worked at a textile mill in Tirupur, known globally for its vast garments export business. For 12 hours of work, they were paid ₹500 each, and given a house to stay in. Even without the lockdown, it would have been a miracle if he had managed to repay his debt in time. But with the lockdown, they lost all their income. 

“This time, my owner decided to send us all back as soon as the lockdown was announced, in April,” said Muthukumar.  

Widespread axiety

His voice reveals the anxieties of many a labour family in rural Tamil Nadu. 

Asked about the lockdown last year, Muthukumar said: “Last time, our owner had retained us for some time. He gave us rations and even paid for the accommodation. But soon, he could not manage (business finances) and had to send us back. So this time he sent us as soon as a lockdown was announced. It has been a month without work.” 

He and his wife were last paid for April. He had also taken a week’s pay as advance. They don’t get paid for the lockdown period.

 “If we work, we get paid. Even on normal days, we don’t get paid when there is no work. It’s a daily wage system,” he says.

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Muthukumar has returned to Vadipatti near Madurai. His family lives in their ancestral home with his mother and his brother’s family. His brother, working in a car paint shop in Coimbatore, is back home as he, too, has been laid off. 

“All our money was spent over the month. For the next month, we have to depend on our mother’s savings. She earned money in the ‘100 days work scheme’ (NREGA). We have to live off that.” Even the NREGA work was stopped since the second wave of COVID broke out.

Muthukumar’s story is not unique. All across rural Tamil Nadu, many have returned home as jobs disappeared in the cities yet again due to rising COVID cases and lockdown fears. Data from the Center for Monitoring Indian Economy clearly reveal the steep rise in unemployment in May this year. The organised sector employs only around 7%  of Tamil Nadu’s total workforce, with the rest being in the unorganised sector.

Financial distress

The situation of Ponnamma,  who lives near Alagar Koil in Madurai district, and whose family used to work in a brick kiln in Coimbatore, is similar to that of Muthukumar. She and many of her colleagues were asked to leave three months ago, as work was limited. Now, Ponnamma and her family are facing acute financial distress, as they cannot find work even in their hometowns. 

“We have mortgaged all our jewels, we have even mortgaged our house just to survive these few months. If we try to go out to find work, the police stop us and treat us very badly. So, my husband and my son don’t venture out to find work,” she said. 

The ₹2,000 handout from the state government has helped her a bit in tiding over a month’s expense. She has no doubt though, that if the lockdown continues and jobs don’t open up, her family will be in a dire condition. She is also extremely anxious about contracting COVID.  

“The local officials have visited us and given us instructions about cleaning our hands and wearing masks. We don’t go out much. If we have fever or cough, we have to go to the hospital (Primary Health Centre). It is about 1 km from here,” she said.

Factory closures

Many youngsters have returned to their villages due to factory closures. Also, many have lost jobs even in the local establishments, as hotels, shops and other services were forced to close down. With the stoppage of work under NREGA, the only available work is in agricultural labour,  but this, too, is not available across all districts. 

According to Ilaya Raja, district secretary of CPIML (Liberation), while there was a fair amount of agricultural work available in Theni district, in other places, including the Cauvery delta region, agriculture is not capable of absorbing all the excess workers from non-agricultural sectors. 

Muthuraku from Vadipatti, who raises cows along with her sons, says that most of the lands have been sold off and the topsoil removed for other uses. Now even the rock is being quarried for sand and other purposes.

“Forget agriculture, we find it tough to graze our cattle in these quarried lands,” she says.

In the Thanjavur delta region, agriculture is mechanised so much that it does not have scope for much labour. Many youngsters have to travel far, even to Kerala and other states, to find jobs. With borders closed and cities shutting down, many have returned home now.

Like last year, this entire year, too, may be lost in paying back the dues, debt and interest they incur while managing  expenses during the lockdown days. The dominant sentiment among workers is that the lockdown will bring more ruin to families than COVID per se.  

COVID vs starvation?

“Whether or not we die of COVID, we shall certainly die of starvation if the lockdown continues and we don’t get jobs” was echoed by many workers we interviewed. 

Most of the low-income families have received ₹2,000 each from the Tamil Nadu government for the month of May, and have been promised another instalment in June.  However,  such minimal cash support will not help them pay their rental dues or loan instalments, which run into several thousand rupees a month. 

Unless the government makes a commitment to offer basic income support for an extended period, the uncertainties will force people into extreme debt.

The Unorganised Workers Federation, which represents non-farm workers including construction workers, vendors and other informal workers in Tamil Nadu, has written to  Chief Minister MK Stalin and Prime Minister Narendra Modi, demanding that all working families be provided with ₹10,000 a month. It has also demanded a one-year moratorium on repayment of formal and informal debt, interest waiver and additional support to meet rental costs. 

In Tamil, “Thozhilalar” means “Workers” and “Koodam” means “Space” or “Forum”. The objective of the Thozhilalar Koodam  blog is to be a space for workers to share information, interact, discuss, debate and engage in collective action.

Courtesy: Covid Response Watch