Representational image. | Image Courtesy: Telegraph India
Over 26% of the workforce in India is without any job thus posing a dire threat to the social fabric and creating unbearable misery for millions. This is the estimate from the latest round (April 19) of weekly sample surveys carried out by Centre for Monitoring Indian Economy (CMIE). The data shows joblessness zooming up after the Modi government declared a countrywide lockdown on March 24 in order to control the spread of COVID-19 pandemic, which has, so far, infected nearly 5 million people worldwide and caused nearly 2 lakh deaths, as per latest reports.
India has so far seen nearly 25,000 cases and 780 deaths. The government is claiming that this is a successful case of controlling the rapid spread of the highly contagious virus and it has attributed the success to the lockdown. However, global experience shows that many countries managed to control the coronavirus without going into such a drastic shutdown of the economy and all its consequences – one of which is this staggering level of unemployment.
As can be seen in the chart above, the joblessness rate had hovered between 7-8% in the preceding months, which in itself is not a very happy state of affairs. But the effect of the lockdown is starkly visible as the joblessness rate rises up to 23.8% within days of the lockdown announcement. Since then, it has increased further to an unheard of 26.2%. This would be roughly about 10 crore persons (100 million).
Not only have industries, offices, shops, etc. shut down for a month now, but the vast informal sector (in both industry and services) has collapsed because of it. The bulk of India’s 440 million strong workforce is employed in this sector which spans across agriculture, industry and services. After three days of mulling, the Modi government had exempted agricultural operations from the lockdown, driven by the strong protests by farmers whose rabi crop was ready to harvest at the time. Yet, such was the haphazard manner in which the government implemented its policy that this exemption did not encourage many farm labourers to start working for the harvesting and post harvesting operations like earlier.
An even more serious dimension of the unemployment crisis is that an estimated 14 crore persons appear to have lost their jobs since the lockdown began. The CMIE survey has thrown up this chilling figure, as shown in the chart below:
The slowdown in the economy preceding the pandemic had already caused the labour participation rate to steadily dip in the months just before the pandemic emerged. This can be seen above where the number of employed persons dips from about 41.8 crore on January 19 this year to 40.4 crore on March 22.
With the lockdown coming into effect, job losses increased exponentially and within five days, nearly 10 crore jobs were being reported as lost. Since then the situation has continued to worsen with the latest estimate for April 19 showing the total number of persons employed at a low of just 27.1 crore. This is a mere 27% of the workforce, and an all-time low.
It should be noted that – on paper – the Modi government had announced that no worker will be thrown out of their job and wages will have to be paid by employers for the lockdown period. The Union Labour Secretary and the Home Secretary sent official letters to state governments clearly advising them to this effect. The Prime Minister himself repeated this ‘plea’. Despite all this posturing, this has not happened and there has been en masse termination of employment. Not surprisingly, the government has not announced anything further to save the workers and employees from the furnace of hunger and destitution which results from joblessness.
So, here is the billion dollar question: what is more important, an iffy lockdown whose utility in stopping the coronavirus is not clear or the lives of millions of people put in danger because of this lockdown? This question will become even more important when the virus surges back after the lockdown is eased, as most experts predict it will.
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