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No work, new debt: Virus creates perfect storm for slavery in India

Unable to work due to coronavirus, many Indians will take out loans to cope and risk falling into debt bondage.

When the coronavirus outbreak brought India to a halt last month, Bhagwan Das lost his only income as a construction worker in Delhi and embarked on a three-day trek back to his village.

Then the loan shark came knocking.

Unable to maintain repayments on the 60,000 rupee ($787) loan he took out in 2017 for his daughter’s wedding, Das had no choice but to offer his son’s labour to service the rising debt.

“My son works on the money lender’s farmland now. He gives him food, but no wages,” the 55-year-old told the Thomson Reuters Foundation by phone from central Madhya Pradesh state.

“We have to repay a loan and will do whatever work he gives us,” added Das, who has yet to even clear the loan’s interest.

A coronavirus lockdown - 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.”

“It is a very risky time … this crisis will only deepen.”

Fears of violence 

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 laborers 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 $23 billion to provide food and cash to millions of its poorest citizens, along with $4 billion from a welfare fund for construction workers.

Exploitation rising

For Odisha-based labour agent Nijam Khan and his business partner K Shivaiah Gowda, who runs a brick kiln in Telangana, the lockdown has caused consternation over the safety of their workers at the kiln, as well as the immediate financial blow.

“Business losses are huge and the impact will be felt in every migrant’s home,” said Khan, explaining how some workers had been given advances of up to 40,000 rupees upon joining.

“There are already talks between manufacturers on a no-advance policy for next season, which means there will be no easy cash available to workers for weddings, funerals or health emergencies.”

Anti-trafficking activists are also concerned that workers who were stuck on site at brick kilns and rice mills when the lockdown was announced will have been overworked and exploited.

“Owners of these facilities have pushed up deadlines for work to be completed, knowing that the workers will … (go) home once the lockdown is opened,” said Jaba Prince, a social worker for International Justice Mission in southern Tamil Nadu.

“The exploitation is rising and will only worsen,” he added.

While the prospect of getting government aid is uncertain for many informal workers, and life post-lockdown hard to predict - Das is sure of one thing when looking to the future.

“The relationship between labourer and lender is timeless,” Das said, referring to his son working for the local loan shark.

“It stretches for many lives.”

This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit http://news.trust.org/climate.

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