JOB LOSSES DUE TO COVID - 19 PANDEMIC IN INDIA

     India imposed one of the strictest lock-downs in the world to contain the spread of COVID-19. This resulted in a near- complete shutdown of all economic activity in April, 2020 with gradual partial lifting of restrictions throughout the month of May. The obvious effect of this lock-down was a massive increase in unemployment. According to data from Centre for Monitoring Indian Economy (CMIE) , the average number of employed persons between March 2019 and March 2020 , in one year before the lock-down was 403 million. Whereas in April, 2020 ,  this number came down to over 282 million, around 28 crore which is a 30% drop.

 WHAT IS UNEMPLOYMENT RATE?

Unemployment is measured by the unemployment rate as the number of people who are unemployed as a percentage of the labour force (the total number of people employed added to those unemployed).

 

Unemployment Rate = Number of people seeking jobs in vain and not getting / Number of people seeking jobs

It is the indicator of the failure of the society for the provision of jobs to the people who are seeking.

According to the CMIE, the unemployment rate in India is 27% after the outbreak of the COVID- 19. Due to the lock-down from 25th March to curb COVID - 19 infections , there has been mass layoffs and heavy job losses. 

This is evident from the scenes of the desperate migrant workers , particularly daily wage earners , fleeing to their own village because they lost their jobs and have no money left to feed their families and themselves.

According to estimates based on National Sample Survey (NSS) and Periodic Labour Force ( PLFS) , about 136 million non - agricultural jobs are at risk. The worst case scenario is for employees who dont have a regular salary. Private sector jobs are also at risk like in airlines , there will be 30% pay-cut. The coronavirus situation will only exacerbate unemployment.

Most affected are the ones in the informal sector who don't have a written contract and these include casual labourers , those who work in non - registered nano business, registered small companies and even the self-employed. They can be fired  without notice. Most daily - wage earners fall in this bracket.

DATA AND STATISTICS

In India , 136 million workers in non - agricultural sector , have no contracts and remain the most vulnerable in the aftermath of the corona outbreak.

• 28 million have no written job contracts in manufacturing.
• 49 million in non - manufacturing services.
• 59 million in services.
• 5 million Indians have job contracts less than a year in tenure.

SECTORS AFFECTED DUE TO LOCK-DOWN

1. CONSTRUCTION - Many of the informal workers work in construction. Employment in real estates construction will be impacted because housing launches and sales will go down due to low economic growth.

2. AUTOMOBILE - Due to falling sales, automobile industry was going down. The industry can lose up-to a million jobs like salesman , semi - skilled workers, dealers.

3. AVIATION - Around 600,000 ground and support roles on contract in the aviation industry are at risk. Already there is 30% -  40% pay-cut in salary.

4. TEXTILES - This industry employs 18 million people whose jobs are at risk due to falling demand.

5. LEATHER - It is a labour - intensive job means there are lot of people employed in this. But due to lock - down , since the shops , malls are closed , so there is no sale hence the work is stopped. Also India's Leather export consignment projects has come to a halt.

6. SERVICES - 31% of India's employed population is working on the services sector. It is a dominant sector for India's GDP. Services sector covers trade, Hotel and management, transport , restaurants and real estate. The work here has been shut down due to lock - down and since there is no income, they had to lay - off their employees as a result of inability to pay salaries.

7. TOURISM - This includes guides , parking contractors , cleaners , waiters in restaurants , suppliers of vegetables , meat and flowers to the hotels. There can be a loss of 20 million jobs if recovery in the industry stretches beyond October,2020. 

8. CREATIVE AND ENTERTAINMENT INDUSTRY - Shooting is stopped that is affecting the jobs of 10 million people employed here.

Due to COVID - 19 lock-down , three - quarters of workers (some 1.6 billion people) engaged in the informal economy have suffered massive damage to the capacity to earn a living. About 90% of India's total workforce are engaged in the informal sector. Only 3%are engaged in the public sector or the Government sector. Another 7% in private formal sector.

The risk of unemployment is very high in the informal sector because the nature of the employment is different from that of formal sectors workers. Further, without alternative income, these workers and their families would have no means to survive. 

WHO LOST EMPLOYMENT IN 2020?

• Small traders and laborers - 91%( 9 crore)
• Entrepreneurs - 18.2% ( 1.8 crore)
• Salaried employees - 17.8% (1.7 crore)
• Farmers - 5.8% (58 lakhs).

SUGGESTIONS

• Urgent targeted and flexible measures to support workers and businesses those in the informal economy and others who are vulnerable.
• Measures for economic reactivation should follow a job - rich approach , backed by stronger employment policies  and institutions, better - resourced and comprehensive social protection system.
• Debt relief measured can be critical in making recovery effective and sustainable.
• Stimulating the economy and employment by lending and financial support to sectors affected.
• Protecting workers in the workplace by providing health access to all and expanding access to paid leave.
• Supporting enterprises , jobs and incomes by providing financial/tax and other relief for enterprises.