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The new urban poor: Salaries gone, pawning gold to pay school fees, NGO meals, rents unpaid

These families are on the brink of urban poverty, forced to do what they once thought was impossible — borrowing for their children's school fees, defaulting on EMIs, falling back on rent, cutting down on necessities.

MANY locks in the nation’s financial capital are being opened one by one, new Covid numbers are falling but most doors — or windows — to any opportunity to earn are still firmly shut.

For countless in this city, gone is the confidence and dignity that a monthly salary assured until just six months ago. An army of women and men, from domestic workers to store-clerks, staff of small manufacturing and service units to delivery staff and drivers, has been without their fixed income for seven months. Their salaries were too meagre for a savings cushion which is now frayed, if not gone.

These families are on the brink of urban poverty, forced to do what they once thought was impossible — borrowing for their children’s school fees, defaulting on EMIs, falling back on rent, cutting down on necessities, pawning their valuables, waiting for meals and dry rations from the Brihanmumbai Municipal Corporation (BMC), NGOs and charities.

Like Isaque Khan (42). Since he lost his job in March as a tailor in a garment unit at a monthly salary of Rs 15,000, he knocked on several doors as his family of seven began relying on cooked meals coming to Malad from charities. “I sold grapes, I sold vegetables, I tried whatever I could but it was just not enough. I have five children to provide for,” he said.

“I stitched some leggings and palazzos at home and started selling them through pheri, door to door (in his densely populated slum of Ambujwadi). With great difficulty, I make Rs 300-400 on some days,” said Khan.

Santosh Sathe (34) from Mankhurd, the city’s eastern border, who has studied till the third year of an Arts degree, worked in a mall in Navi Mumbai and was paid half his monthly salary, Rs 6,250, for two months of the lockdown. The malls opened in August but he was asked not to return. “They retained only one in seven staffers saying there is no business,” Santosh said.

Each day he tries to find a job as a “helper” at Rs 500 a day. “There is no guarantee that I find work daily,” he said.

One of his brothers is an autorickshaw driver, whose earnings, too, have reduced; another brother works at a political party office and one is unemployed.

Anita, Santosh’s sister-in-law, says that a year ago, she set up a sewing machine to add to the family income. “That machine lay shut for a few months during the lockdown. Now, very few women come to get dresses or blouses. There is no extra money to be spent on these things anymore,” Anita said. Her two children, 5 and 11, are finding it difficult to manage online classes on the single smartphone they have to share.

Few have a first-hand sense of the distress better than Kishan Singh Rajput who owns a gold shop in the Janu Pada slum in Kandivali East – that’s his business.

He said he sits on gold jewellery worth Rs 70 lakh pawned with him for cash since the lockdown: as many as 300 people have mortgaged their bangles, chains, earrings and even Mangalsutras.

“They take cash in return which they will repay with 2 per cent interest each month. Some said they wanted to pay rent, others had a hospital bill, some others had to pay their kid’s school fee. Everyone is helpless,” said Rajput.

Among the 300 names in his register is that of Prathamesh Khandekar (22), who worked as a driver in a private car renting agency prior to the lockdown and brought home a salary of Rs 18,000 a month.

The lockdown took away his job and halved his father’s salary from a modest government job. Expenses mounted when his father suffered from pneumonia in April. “We ran out of our savings after the medical expenses. Then I sold two gold chains and mortgaged my mother’s Mangalsutra. I raised Rs 8,000 by selling the two chains. We are hoping it will help tide us over until I find another job. I have been trying very hard,” said Khandekar.

Khandekar is among many seeking credit with little by way of collateral, falling out of the purview of any government credit scheme. “People who had proper jobs have been without work for months. Some of them have no choice but to borrow from private lenders when they fail to get bank loans,” said Bilal Khan of Ghar Bachao, Ghar Banao Andolan that works for housing rights in slum settlements. He said some slum loan sharks who earlier charged 5 per cent interest have upped their interest rates to 10 per cent and, in some places, a brutal 20 per cent.

Vanita Pawar (40), a domestic worker from Khairani Road near Saki Naka, had a monthly income of Rs 9,000 from three homes where she worked before the lockdown. She had borrowed over Rs 5 lakh from a credit society and friends and carved out a room and a mezzanine out of her one-room home. She would short-let the space to three tenants at a time, charging a deposit of Rs 20,000, and a monthly rental of Rs 4,000.

“I made all this after my husband died six years ago so I could afford education for my children,” she said. After the lockdown, she lost her job at all three homes and she has had no tenants.

Her son, pursuing a B. Sc (IT) course in a private institute may now have to skip a year. “I scraped Rs 5,000 to pay my daughter’s college fee. The fee for my son’s last year is Rs 40,000. I just can’t pay,” she said.

Her unpaid pile is rising. “I have not been able to pay the electricity bill for six months. I have not been able to make the Rs 5,000 monthly repayment towards the loan. I get calls from everyone asking for their dues but I tell them where am I supposed to get it from. People like us need to be accommodated a little longer until we get some work,” she said.

Her eldest daughter who gave tuitions to school children is also without work. “The students’ parents have no money to pay my daughter,” she said.

Pictures of Babasaheb Ambedkar and Gautam Buddha hang on the wall facing the door to Pawar’s home that packs in a tiny kitchenette, a slim attached bathroom, a refrigerator, a wall-mounted TV and a single bed. The Pawars tided over the last few months with dry rations from NGO Jan Samrajya.

According to an analysis by the state Finance department submitted earlier this month, the unemployment rate in the entire state spiked to 20.9 in April from 5.8 in March. In August, after the unlockdown, it stood at 6.2 — but experts said that doesn’t factor in vast sections of the informal sector where salary payment was in cash.

Indeed, an 11-member expert group constituted by the state government to recommend economic revival measures in response to COVID-19, called for “direct” support to “vulnerable groups” via a “web-based social program rolled out using Aadhar, PDS… and Municipal databases.”

Acknowledging the long road ahead, a senior official said: “After Chhattisgarh, none of the states came up with schemes for cash disbursement because the economy is inflationary. The thinking right now is that it is better to give food security through rations.”

That may not be enough. Measures like MNREGA, that helped in rural areas, are not feasible in cities since there is little work that is not contractor-based, said Abhay Pethe, professor of Economics at the Mumbai University.

“There should be a cash transfer to the most vulnerable. Maharashtra has enough headroom to borrow…Red flags come up when debt servicing goes above a certain percentage of revenue inflows. We have not reached that yet. We have about 7-8 per cent to go. But we have to be bold about it. We can’t just wait for the Central government’s schemes and aid packages,” said Pethe.

 

 

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