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Photo: Bhushan Koyande/Hindustan Times
Photo: Bhushan Koyande/Hindustan Times

Opinion | Job destruction is a serious flashpoint

A survey has reported a calamitous spike in joblessness across urban India. Employment conditions are only likely to worsen. Such acute distress calls for heavy fiscal intervention

Unemployment in the country has always been a slow-burn crisis, but the urban flare-up witnessed after the nationwide lockdown took effect on 25 March should worry policymakers. India had no safe option other than to shut down, as only strict social isolation could have bought us the time needed to erect defences against a rapidly advancing threat to people’s lives. Nearly three months after a novel coronavirus was identified in China, we still do not have a cure for covid-19, the disease it causes. Its virulence was sure to throw all semblance of normal life out of gear. That livelihoods would be snatched away by it was regrettably obvious too. But when the scale of the disruption is thrown into sharp relief by jobs data, it enjoins the government to respond with all the resources it can muster to alleviate distress. According to the weekly tracker survey of the Centre for Monitoring Indian Economy (CMIE), India’s urban joblessness spiked its way above 30% over the past two weeks of the ongoing 21-day lockdown. In contrast, this figure was just about 8.7% during the week ended 22 March, and a little over 8.2% in the week before that. The country’s overall unemployment rate, as estimated by CMIE, shot up to nearly 24% in the last week of the previous month, falling only a bit in the first week of April.

Since CMIE is a private research organization, the government is under no obligation to either acknowledge or act upon those grim figures. It has its own survey apparatus and some of its officials have rejected survey findings in the past, often alleging flaws in statistical tools that could put the accuracy of some numbers in doubt. Estimates are approximations at the best of times. Yet, under the impact of an economic shock, absolute numbers are not as relevant as the magnitude of change. And what the private weekly tracker has revealed seems consistent with spot reports of workers being turned out of their jobs and the reasons cited by migrants for heading back to their villages. All this is only the immediate fallout of commercial activity having come to an abrupt halt. As supply lines stay clamped, or struggle to regain their pep, and demand craters in one sector after another in a sequence of second-order effects, we should expect business turmoil that will likely result in even more job losses across the economy. Already, weak order flows have prompted companies to shed staff. Many businesses could go bust. Clearly, casual or informal-sector workers, who have the least by way of safety nets, are not the only casualties of the covid crisis. Even if the lockdown is lifted, analysts fear that millions would slide into poverty.

The mass income deprivation being observed cannot be resolved simply through instant relief measures or moral suasion—both of which are, of course, welcome. Cash transfers, meal provisions and other forms of aid must reach the needy as quickly as possible to avert a humanitarian disaster. This is top priority, no doubt. But sustaining incomes requires the government to save the most severely weakened parts of the economy. This calls for a vast rescue exercise in the shape of a fiscal package of a size unseen in Indian history. How it could be funded may be a point of perplexity, given that our government finances are already stretched, but funded it should be—one way or another. For now, much administrative attention might be focused on an exit strategy for the lockdown, as it should be. But the economy is crying out for help too.

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