Measuring vulnerability accurately is difficult but an analysis based on data from official sources suggests that even in the most optimistic scenario, close to 30% of India’s urban population could be out of savings and unable to cover essential expenditure by June-end. In contrast, the rural poor, though hit hard, are relatively better off with still some savings and welfare support to fall back on.

According to one survey, 84% of households suffered a loss in income since the lockdown. As incomes fell, Indians had to rely more on their savings to cover essential expenditure. But for the poorest in cities, these savings rapidly dried up. To estimate how quickly savings are running out, we consider different scenarios of income losses for the poorest 50% of Indians (rural and urban separately) during the lockdown. For instance, in the worst-case scenario, we assume incomes in cities fell by an average of 82% across the three phases of lockdown between April and June while in rural India, which was less affected by the lockdown, we assume incomes fell by 66%. These scenarios are based on different studies that all report income losseswithin these ranges.

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