Virendra Pandit
New Delhi: The second wave of Covid-19 has severely impacted household incomes and over 10 million people were thrown out of the job market amid local lockdown imposed in several states, the country’s major think-tank Centre for Monitoring Indian Economy (CMIE) said on Tuesday.
The impact of these local restrictions was felt by people working in the informal sector, CMIE’s fresh data revealed.
In the second wave of the pandemic, starting in late March and peaking early in May, more than 10 million Indians lost their jobs. Since the beginning of the pandemic in early 2020, around 97 percent of Indian households faced income loss, CMIE’s CEO Mahesh Vyas said.
The unemployment rate measured by the think-tank is expected to come at 12 per cent at the end of May as against 8 percent in April, Vyas said, adding this signifies that about 10 million Indians have lost jobs in this period, according to media reports.
Stating that the main reason for the job losses is “mainly the second wave” of Covid-19 infections, Vyas said, “As the economy opens up, part of the problem will be solved but not entirely.”
Those losing jobs find it hard to get employment, specifying that while the informal sector jobs come back quickly, the formal sector and better quality job opportunities may take up to a year to come back.
India’s unemployment rate had touched a record high of 23.5 percent in May 2020 because of the nationwide lockdown. Many experts believe that the second wave of infections had peaked in May and states will slowly start to ease the economic activity-impacting restrictions in a calibrated manner.
Vyas said an unemployment rate of 3-4 percent should be considered as “normal” for the Indian economy, hinting that the unemployment numbers will have to decline for longer before the situation improves.
He said CMIE has completed a nationwide survey of 1.75 lakh households in April which point to worrying trends on income generation during the last year, which witnessed two waves of the pandemic.