Covid-19 impact on employment in India

COVID-19 may offer both challenges and opportunities to IT firms!

IT firms start issuing pink slips, 1.5 lakh employees may lose their jobs according to HR-Experts and industry players, IT professionals may be laid off in the next 3-6 Months as novel coronavirus outbreak intensifies small and mid-sized firms are struggling to stay afloat the IT Industry employs about 45-50lakh of which smaller firms account for about 10-12 lakh. The top IT firms like Microsoft, Wipro and Infosys employ close to 10 lakh manufacturing in business enterprises have paused with projects ramping down the majority of pink slips are issued to employees of small firms.

According to London Based Capital Economics, CoronaVirus may cause extensive damage to the Indian economy with GDP falling heavily to 1%, Accurate ratings have said that the lockdown is costing Indian economy $4.64 billion every day The employment situation in America is even worse. A record of 6.65 million Americans filed first-time unemployment claims in the week that ended on March 28 the number was around 3.2 million in the preceding week.

Major job losses were in the hotel, food and travel industries Economists at Federal Bank at St. Louis warned that at the current rate of job losses unemployment might reach 32%, IMF also said that Global recovery will be possible only by 2021.

While we hope to get a clearer picture of the health coronavirus curve in India,

We already have the first estimate of the destruction of employment caused by the national blockade. The numbers are staggering, worse than anything the world has ever known. More jobs were lost in India in the past two weeks than anything recorded in economic history. The number of "precariat" in India today may be almost as great as the population of Russia.

First, let's understand the data source,

the unemployment monitoring survey published by the Center for Monitoring the Indian Economy (CMIE),

The only data source of its kind that reports unemployment daily, monthly and quarterly. The CMIE interviews some 3,500 randomly selected people every day in its consumer survey. After the shutdown, like everything else, the survey also stopped. However, they managed to carry just 2,289 interviews in the last week of March. But the data was not released as the sample was too small and the week was quite unusual. Repeating the field survey was not possible, but CMIE field staff managed to do 9,429 telephone interviews to collect data for the week ending April 5. The sample was smaller than usual but large enough and fairly representative in terms of rural/urban areas, class, etc. These results were no different from the figures they obtained from the even smaller sample from the previous week. So, after due verification, this Monday, the CMIE released its first dataset and analysis.

India currently has a population of approximately Rs 137 million. Of this, around Rs 103 million is of working age, above 15 years. Let's take the broader definition of employment to include any type of paid work, formal or informal: salary, daily wage, or self-employment of any kind. Using this definition, in February 2020, the pre-coronavirus pandemic and national closure, about 40.4 million Crore Indians were employed, according to the CMIE report for the month. At the time, 3.4 crore rupees were unemployed.

Compare this to last week's numbers. The CMIE estimates that only 27.7 per cent of the working-age population (103 crores) were employed in the week after the blockade began. This corresponds to 28.5 crores. Within two weeks the number of people in employment fell from 40.4 crores to 28.5 crore, which corresponds to a decrease of 11.9 crores. (To be doubly sure, I called Mahesh Vyas and confirmed that I had drawn the correct conclusion from his data.)

Let this take its toll on you: Around 12 million Indians have lost their jobs in the past two weeks. Let us assume that 8 million of them are the main earner or the only earner in their family. A third of the country's 25 crore households (government data from 2011) could face a livelihood crisis.

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