COVID in India: 1 Crore people lost job; 97% families became poorer

The second wave of COVID in India has claimed the jobs of one crore Indians and about 97% Indian families are poorer because of the pandemic.

Mahesh Vyas, CEO ofa prrivate think tank Centre for Monitoring Indian Economy (CMIE) revealed these statistics.

He also claimed that May-end unemployment rate could be up to 12%. It is pertinent to add that this figure was 8% in April.

Last year, during the first wave of the pandemic COVID, due to the nationwide lockdown the unemployment rate reached a record of 23.5%.

Many experts point out that the peak of the second wave of COVID is past us and thus states will now be able to gradually unlock restrictions. This should help boost the economy.

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Side effects of COVID on employment:

·        Those people who have lost their jobs will have difficulty finding another job.

·        Jobs in unorganized sector will bounce back quickly, however quality jobs and those in organised sectors will see time before meaningful job opportunities materialise.

·        The economy is opening up. Consequently, unemployment’s problem will begin to resolve a little bit, however the issue will remain.
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·        Currently, the labour participation rate is down to 40% which before COVID was 42.5%.

3-4% Unemployment is normal for the Indian economy

Vyas claimed that 3-4% unemployment rate is normal for the Indian economy. Moving forward the unemployment rate will come down.

CMIE concluded a nation-wide survey of 1.75 families. The survey revealed a troubling trend. In the survey only 3% families claimed that their salaries increased, while 55% claimed that their incomes dropped. The remaining participants, 42%, claimed no change in their incomes.

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If accounted for inflation, this means that the salary of 97% of the families decreased.

For the week ending on May 30:

Urban unemployment rate reached 17.88% while the national figure was 12.15%. As per the data, the urban unemployment rate showed an increase of 3% in the last 15 days, whereas in the week ending May 2, this figure was 10.8%.

The CMIE data continued that the rural unemployment rate dropped to 9.58%. A fortnight ago, this figure dropped by 4%.

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The labour force participation rate was 35.69%, while in the week ending on May 16, the same in urban areas was 37%.

Prediction: Urban areas will have high unemployment rate for the next six months

Dr K R Shyam Sundar, Labour Economist claimed that a high unemployment rate will hold for about three to six months because of three main reasons:

1.      Less livelihood opportunities.

2.      Hesitation of companies in hiring new people.

3.      Scientists’ claim that COVID may transmit via air increasing risk in performing job duties.

Except Information Technology (IT), employment opportunities scarce

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Dr Sundar continues that IT and allied sectors are the only saving grace where the opportunities for employment abound. Other sectors like Fast Moving Consumer Goods (FMCG), automobiles, urban markets, unorganised sectors, hospitality, and tourism provide no reason for cheer.

Business is down, consumption has declined, and we are trapped in a circle.

COVID pandemic statistics in India

·        New cases in the last 24 hours: 1.26 lakh

·        Recovered in the last 24 hours: 2.54 lakh

·        Deaths in the last 24 hours: 2,781

·        Total infected: 2.81 crore

·        Total recovered: 2.59 lakh

·        Total deaths: 3.31 lakh

·        Total undergoing treatment: 18.9 lakh

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