Is the Pandemic Pushing India To an Unprecedented Unemployment Crisis?
Grow Your Business, Not Your Inbox
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Over the past one year, our economy has been going through a slowdown and people are losing their jobs. If we see the unemployment rate of our national capital, Delhi, it has increased by 17 per cent in the last eight months. This dismal trend is observed across the country with participation of women declining each passing month. According to the experts, the situation is set to go further downhill because of the unavailability of a comprehensive job retention programme. On the top of that, the current rise in COVID-19 cases represents a threat to the livelihood of thousands of workers as 57 per cent of India’s total population has been forced to remain indoors due to the lockdown or strict curfews in many of the states.
A latest report from Centre for Monitoring Indian Economy (CMIE) suggested that salaried jobs across India registered a sharp decline in 2020-21 to the tune of 9.8 million. India had a total of 85.9 million salaried jobs in 2019-20 which, by the end of March 2021, reduced to 76.2 million. The surge in COVID cases also signifies that the salaried job loss will be more in the urban areas in the coming years. The situation in rural areas would be the same or worse as small cities and its adjoining areas are more affected than in 2020 and this is certainly disturbing the overall employment scenario in the rural areas. The CMIE report further added that people who have lost jobs in rural areas migrated to farming.
However pandemic isn’t the only reason of salaried job loss in India, there are other factors behind the ongoing job crisis in India:
The coronavirus pandemic and its subsequent lockdowns and strict curfews have impacted the business in a big way as the movement of goods has been restricted. Entrepreneurs are in a big fix because there is no clarity on when the lockdown will be subsided. As the cases are rising and the virus is mutating at a very fast pace, the lockdown is also getting extended in order to curb the further spread and reduce the death rate. Besides a selected few businesses, the majority of the enterprise's revenue have crashed. Directly or indirectly, salary cut is leading to job loss in every sector.
It has been observed that a greater part of people, who lost their job with the onset of the lockdown last year, haven’t taken up a new job due to the uncertainty and the fear of the COVID pandemic. This is also one of the reasons behind the rising instances of unemployment in our country. We are hopeful of the fact that when the vaccination coverage will be extended then the fresh streak of antibodies will kick in and unemployment rate will be dipped significantly.
The rising entrepreneurship wave
Few years ago, India witnessed a fresh new wave of entrepreneurship and many people have left their salaried jobs to be a part of this trend. The reason behind this transition could be people were not experiencing growth in salaried jobs in the country. In our country, salaried jobs do not seem to grow in tandem with economic growth, or even with an increase in entrepreneurship. But, this is evident that they are suffering the most during the current economic meltdown. Data also represents the fact that despite India’s rapid growth before 2019, salaried jobs grew at a snail’s pace. Salaried jobs grew from 21.2 per cent in 2016-17 to just 21.6 per cent in 2017-18. It inches to 21.9 per cent in 2018-19. In FY20, India had over 7.8 crore entrepreneurs compared to the salaried jobs, which remained steady at 8.6 crore. Even the whopping 63 million MSMEs in India have been heavily impacted and they have not yet been overcome from the losses. Since there is an extreme pressure to revive their business, it’s also contributing to the job loss scenario.
The urban job meltdown
It has been seen that the farmers and daily wage earners ratio in India is more as compared to the salaried jobs. Farmers and daily wage earners constitute two-thirds of the Indian working population. This shows Indians are more comfortable in getting informal jobs, where it is comparatively easier to get jobs. However, such form of employment heavily depends on demand originating from the urban economy, comprising mostly salaried jobs. But, when the sudden meltdown of salaried jobs happened in India, the informal economy also affected by it leaving thousands of small-scale traders shutting their shops. The rural economy stood stable during the economic meltdown resulting from the sudden lockdowns.
However, a plethora of new opportunities has come up as the vaccination drive has been extended to the youth age group as well. It’s time to explore new job opportunities with new age skills as banking, finance and fintech have emerging job opportunities. We need to bridge the skilling gap by identifying what all skills are needed to upgrade yourself in order to stay more relevant in today’s job market. Here, job-oriented training institutes play a pivotal role in producing industry-ready professionals in marketing, accounting, taxation, blockchain, artificial intelligence, machine learning and data analytics.