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With coronavirus cases on the rise in March 2020, India implemented a strict lockdown on the 25th to prevent infections, causing misery and mass unemployment. Lockdowns severely harmed India’s economy along with global headwinds. The IMF forecasts a 1.9 percent GDP growth rate for the country in 2020, the slowest pace since the balance of payment crisis 1991.

In February 2021, India’s unemployment rate was 6.9 percent, down from 7.8 percent in February 2020, indicating that the unemployment rate in the country had returned to pre-Covid levels.

Shrinking labor force

Economists point out that the labor market was already depressed, before the outbreak, with significant unemployment resulting from the economic slowdown.

According to the Center for Monitoring Indian Economy, the labor participation and employment rates in the last month remained low, indicating labor fallout from labor markets due to lack of jobs.

CMIE’s data revealed that the labor participation rate in February 2021 was 40.5 percent, less than 40.6 percent in January 2021, and 42.6 percent in February 2020. Thus, restoration of unemployment rates to pre-Covid levels, as said by CMIE, reflects a decreasing labor force rather than a decrease in the number of unemployed.

Employment decline

Job losses and unemployment are being recorded in metropolitan areas and rural India, which has been hit harder by the second wave than the first.

CMIE further said that the number of employed people had dropped dramatically over time. On average, 405.3 million people were employed during July and February of the last fiscal year. In contrast, 395.2 million people were employed during the same period of the current year, which implies 10 million fewer jobs than the previous year.

As a result, the post-lockdown era is marked by a 2.5 percent drop in employment and a 6.2 percent drop in unemployment count and equals a 2.8 percent reduction in the labor force.

The rate of unemployment increased to 14.45 percent for the week of May 16. According to CMIE data, it was higher in urban regions at 14.71 percent and somewhat lower in rural areas at 14.34 percent. The unemployment rate in India has not been this high since the week of June last year, when it was 17.51 percent.

According to the data provided by CMIE, Haryana (32.5 percent) and Rajasthan (28.2 percent) had the highest unemployment rates in December 2020. In comparison, Odisha (0.2 percent) and Tamil Nadu (0.5 percent) saw the lowest. Among other southern states, Karnataka had a relatively low unemployment rate of 1.4 percent, while Kerala had a rate of 6.5 percent, Andhra Pradesh 6.7 percent, and Telangana had 7 percent.

On the contrary, individuals have participated in the lottery games to try their luck to earn due to unemployment. Lottery Sambad is one of the most popular lotteries in India, which was put in place to get people out of poverty and deal with unemployment. Additionally, it aided the population in getting medical facilities during COVID. Another famous lottery is Shillong Teer, and people can check the Shillong Teer result online.

Ongoing job losses

According to Santosh Mehrotra, a labor economist and former JNU professor, even though the unorganized sector has experienced the most significant changes in the labor market during the second wave of the pandemic, the organized sector had already lost 18 million jobs in 2020-21. Moreover, the trend has continued unchecked in the current fiscal year.

In April 2021, India lost around 3 million regular jobs. Furthermore, unlike the previous wave, rural supply chains would be harmed, as farmers and cultivators are also affected.

The second wave has harmed self-employed and informal workers in cities, and it is evident from the migration of many people back to their villages. As COVID cases have risen in rural areas, microfinance players have warned about the impact on incomes in the countryside, with almost no economic activity in specific locations.

Disclaimer: This is a company press release. No HT journalist was involved in the creation of this content.

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