The impact of the two COVID waves and attendant lockdowns on Indian households and workers cannot be overstated. Even before the devastating second wave, several sources suggest that millions of households became poor, reversing hard-fought gains in poverty reduction. More than half of the informal workforce lost work and incomes, and over two-thirds experienced increased hunger (see Annexure 2 in this note). Poorer households have borne the brunt of the impact and inequality has, without doubt, worsened and deepened. The ongoing second wave and localised restrictions have not only exacerbated the shocks of 2020 for the urban poor and migrant workers but have also made rural households and non-poor households newly and deeply vulnerable. Women, children, and socially disadvantaged groups, in particular, are at a higher risk of falling behind over the longer term. Unless bold steps are taken, these effects may be long-lasting.

