As was expected, the continuing lockdown has taken a serious toll on jobs, pushing about one-fourth of the workforce out of gainful employment. Data from the private think tank Centre for Monitoring Indian Economy (CMIE) for the week that ended on May 3 showed unemployment had shot up to 27.11% from 6.74% for the week that ended on March 15.
Unemployment in urban areas, which is where the corona hotspots are concentrated, is even higher at 29.22%. As many as 114 million people lost their jobs between March and end-April, according to CMIE. Given the country’s total number employed before the pandemic was 400 million, more than one in every four employed have now lost their jobs.
Joblessness is on an upward curve. As the lockdown progresses to the third week of May, and with some states announcing curfew extensions till the end of May, unemployment figures are going to get worse before they get better. Significantly, reverse migration—those who had travelled out for jobs now beginning to find their way home—will make it difficult for a swathe of industries to find the labour and talent to crank up and restart operations.
Economists have warned that large sections of migrant workers and other vulnerable employees without proper contracts now run the risk of slipping into poverty. At a holistic level, India’s battle against poverty will see a major setback in the weeks and months to come. Infosys founder N R Narayan Murthy’s words of warning, that hunger may claim more lives in the days to come than the coronavirus pandemic, have to be weighed seriously.
It is a long haul to put the economy back on the rails. Meanwhile, to stave off mass deprivation, economist and Nobel laureate Abhijit Banerjee has suggested a massive stimulus package involving direct cash transfers to the bottom 60%. This will give the most vulnerable immediate relief; and the paying capacity will fire up demand and the wheels of the economy. One hopes the political class will implement this proposal with the seriousness it deserves.