Covid second wave delivers a blow to April employment in india

~ by Trinanjan Chakraborty

India is now in the throes of a deadly second wave of the COVID-19 pandemic that is raging like wildfire across the land for over a month now. Daily fresh infections have crossed the 4 lakh threshold with close to 4000 people dying yesterday. Although the central govt. has avoided a nationwide lockdown policy which it had adopted to counter the first wave, almost all states have been forced to resort to curbs and restrictions in order to check the rapid spread of the pandemic. This has expectedly had a drastic effect on employment in the country.

During April’21, the unemployment rate in India measured by the Center for Monitoring Indian Economy (CMIE) has climbed up to 7.97% – the highest it has reached this year. The national unemployment rate was 6.50% in March. Both urban and rural have borne the impact with urban unemployment at 9.78% (up from 7.27% in March) and rural at 7.13% (up from 6.15% in March). CMIE estimates put job losses in the country at 7.35 million in the month of April’21, seriously denting the economic recovery that had been anticipated after the first wave of the pandemic ravaged the economy during the first two quarters of the previous fiscal.

It is worth noting that at the beginning of April, lockdown/curfew conditions were mainly in place in Maharashtra. However, during the month, one by one, most states have had to introduce similar measures which are likely to continue into the month of May as well, resulting in the employment scenario remaining bleak this month as well. Moreover, the severity of the second wave has meant that demand for work has dried up voluntarily in many cases even without restrictions especially in the informal sector.

With the horrific experiences of last year’s lockdown, large nos. of migrant workers preemptively left urban centers to go back to their villages from end March itself. This is somewhat supported by MGNREGA statistics: work demand during April was over 4 crores vis-à-vis ~3.6 crores in March. The E-way bill collection contracted 17.5% m-o-m, the sharpest drop since April last year when the full lockdown was in place. At INR 5.9 crores, it is also the lowest since Nov’20.

With most experts predicting the second wave of the pandemic to only weaken by the last days of May and with slow pace of vaccinations (only 2.3% of population having received both doses as of 6th May), it is difficult to envisage a fast turnaround from the current gloom in the employment market.

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