Recent data during the ongoing pandemic suggests that not only have jobs evaporated due to the economic freeze, people have also been forced to move to less productive and poorly paid alternatives. The sectoral break-up recently released by the Centre for Monitoring Indian Economy (CMIE) shows that while most segments of the economy suffered huge job losses, agriculture actually gained.
From about 140 million employed in farm jobs in the March-June 2020 quarter, the number leapt to 158 million in the quarter ended 30 September 2020. It declined marginally in the October-December quarter to 154 million, but it was still 3.5% higher than the comparative quarter of the previous year. On the other hand, in the services sector, employment fell from 140 million to 128 million in the quarter ended September 2020.
Manufacturing similarly has been a big loser, with 12 million jobs disappearing from March to December 2020 and with little signs of recovery in the near term. These figures should have alarm bells ringing as it points to people moving from productive and well-paying jobs in retail trade, education, and travel and tourism to areas that require fewer skills like farm labour and the construction industry. Interestingly, real estate and construction too has seen a near-complete recovery of employment by December-end.
The pandemic therefore has not only hit people with job losses, but for those holding jobs, it now means a lower quality of life. Another area of concern is people giving up being part of the active labour force because of the drying up of jobs. Studying the trend over the last few years, economist Vinoj Abraham has found that after 2014, there has been an absolute decline in employment for perhaps the first time in independent India.
Labour participation—or the size of the economy’s active workforce—has actually fallen to 35% now from 46% before the November 2016 note ban crisis, according to CMIE. People dropping out and being forced to depend on their family, and the youth taking jobs below their station are adding to the fires in the economy. These are important signals the government cannot ignore.