The COVID-19 crisis provides an unsettling but accurate glimpse of the social upheaval that a sudden shift into digital futures could bring. India’s unemployment rate is now at an eight-year high, with 7.1 percent for urban men and 10.8 percent for urban women, according to the 2018 labour force survey, up from 3 percent for urban men and 5.3 percent for urban women in 2012. These figures indicate that existing job creation processes are out of step with the changing labour market. To avoid wasting money on already over-saturated skilling courses that do not feed into the labour market, data on such dead ends must be gathered. Instead, focus and money should be geared toward developing gender-neutral courses in order to achieve gender parity in the labour force, as well as a new generation of qualified professionals who can meet the demands of the fourth industrial revolution.
The Economic Cost
The pandemic of Covid-19 has had a major negative impact on production. The numerous costs of financial distress that businesses face long before imminent bankruptcy, combined with the threat of firm bankruptcies on the one hand, and the risk that jobs lost during the lockdown will not be completely recovered on the other, generate the risk of economic hysteresis, which must be prevented at all costs. The Economic Survey 2020-21 cautioned that all jobs lost due to the coronavirus crisis may not be reclaimed even after the economy picks up speed, urging all-out measures to avoid an ‘economic hysteresis,’ or the recession’s long-term negative effects.
Well before the pandemic, the real estate industry, and hence construction workers,
were in disarray. Property developers are unable to obtain financing for new
developments due to a mountain of debt. The majority of migrant labour workers in
cities like Mumbai work in the construction industry, which means that they have not
only gradually lost employment, but they also need to be rehabilitated into new
avenues as soon as possible due to the pandemic’s aggravated economic stress. At the
very least, repatriation would take up a significant portion of the next few years.
Establishing and delivering transfer skills sets to low-skilled employees is a more
resilient solution for potential pandemic management and the resulting job disruption.
It is essential to identify a fixed number and category of low-skilled workers, as well
as a contingency plan to include transitional skills during times of upheaval. Existing
centres can be used for these types of transfer courses, which can be expedited in an
emergency.
The Dichotomy of Sustainable Growth
According to data from the Centre for Monitoring Indian Economy (CMIE), the unemployment rate was 6.9% in February 2021, marginally lower than 7.8% in the same
month last year and 8.8% in March 2020, when the country was under lockdown. The unemployment rate peaked at 23.5 percent in April and stayed at 21.7 percent in May, according to the report. It began to decline from June onwards, when it was registered at 10.2% for the month and then improved to 7.4% in July. According to CMIE statistics, the unemployment rate increased marginally to 8.3 percent in August after improving to 6.7
percent in September last year. According to CMIE statistics, the unemployment rate
increased to 9.1% in December 2020, then decreased to 6.5 percent in January.
During the lockdown, only the rural economy has seen steady growth, as farming has become the last refuge for those who have lost their urban employment. The majority of daily wage workers who were forced to return to their hometowns were the primary cause of a fourteen million increase in farm jobs. The farm sector, which employs over 55 percent of the country’s population, has done well since all agricultural activities were allowed even during the lockout, but that there is room for improvement in hiring in urban and industrial areas. Rural development, on the other hand, is insufficient for an economy that requires the creation of at least ten lakh formal jobs per year to sustain the country’s growing youth population.
Government’s Involvement
The government has taken a number of measures to raise new hiring in the country, but
sustained improvement in the country’s job situation would require repeated policy
interventions and ground-level monitoring of existing schemes and initiatives. Around 16.5
lakh people have benefited from the government’s Aatmanirbhar Bharat Rozgar Yojana (ABRY), which was launched in October to promote hiring in the country in the face of the COVID-19 pandemic and will last until March 9, 2021. The Government of India is crediting
both the employees’ share (12 percent of wages) and the employers’ share (12 percent of
wages) of contribution payable under the ABRY for a two-year term.
To support and stimulate job creation, the government has enacted legislation. Under the
Pradhan Mantri Garib Kalyan Yojana (PMGKY), the Government of India has contributed
12% employer share and 12% employee share under Employees Provident Fund (EPF),
totalling 24% of wage for the wage month from March to August 2020, for establishments
with up to 100 employees and 90% of such employees earning less than Rs 15,000. A total of Rs 2,567.66 crore was credited to the EPF accounts of 38.82 lakh qualifying employees under the PMGKY scheme.
The Bottom Line
As it happens, we are at a time in history where globalisation and industrial output are at an all-time high. Yes, the pandemic is a major impediment when it comes to the economy functioning, however that isn’t here to stay. It is true and we must be hopeful that new opportunities will present themselves as soon as the market fog lifts and what we can do in this moment is be prepared for seizing that opportunity.