According to the reports, the second wave of COVID-19, that has ravaged the Indian healthcare system and has resultant in localized lockdowns have severely impacted the employment rate in India. According to the Centre for Monitoring Indian Economy (CMIE), over 75 lakh jobs have been lost which has taken the unemployment rate to a four-month high of 8 per cent.
The CMIE’s managing director and chief executive Mahesh Vyas stated that “The situation on the employment front is expected to continue to remain challenging going forward as well.”
In his comments made in an interview, he stated that “In the month of April, compared to March, we have lost 75 lakh jobs. That is what has caused the jump in the unemployment rate.”
Reportedly, the national unemployment rate has touched 7.97 per cent as per the Centre’s proprietary data. Urban areas have witnessed higher stress at 9.78 per cent, while the rural joblessness stands at 7.13 per cent.
In March, the national unemployment rate had stood at 6.50 per cent, and subsequently the rate of unemployment in both rural and urban front was lower.
Thus, it can be rightly stated that the second wave of the COVID-19 pandemic has exacerbated the unemployment problem in India. The reason for the decrease in the employment rate can also be attributed to the fact that various states have imposed lockdown and night curfews to mitigate the pandemic. With only essential activities being allowed in the state, it has resulted in stagnation of economic activities and has thus resulted in job losses.
Vyas stated that “I do not know about the peaking of the COVID wave, but I can see stress on the employment front.”
Vyas added that, “What is likely to happen is that unemployment can remain at high levels and additionally the labor force participation rate can also fall. In worst situation, both can happen.”
However it is to be noted that the situation, at the current moment, is not as dire as the one that was witnessed in the first lockdown, imposed in March 2020, when the unemployment rate had touched up to 24 per cent levels.
Currently, India is reporting around 4 lakh new infections daily and over 3,000 deaths. In an address to the nation last month, Prime Minister Narendra Modi had advised states to look at lockdowns as a last resort, because of its impact on economic activity.