- GS-2: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
Employment & Recovery of Indian economy
Context: Hit by a relentless second wave of COVID-19 infections, India has seen localised lockdowns across several States.
Do You Know?
- Labour participation Rate(LPR) is the measure the section of the population that is willing to take on jobs.
- Unemployment is a subset, which helps in giving a measure of those who are willing to take on jobs but are not employed.
How have lockdowns affected jobs?
- According to the Centre for Monitoring Indian Economy (CMIE), the unemployment rate was 6.5% in March 2021 but rose to around 8% in April, the month when several States began to prepare for or had already imposed lockdowns.
- With 73.5 lakh job losses in April 2021, the number of employees (both salaried and non-salaried) fell from 39.81 crore in March to 39.08 crore in April for the third straight month.
- In April 2020, which was the first full month of the national lockdown last year, the unemployment rate had zoomed to 23.5%.
|Rural-Urban Variation in Unemployment||
|Gender variation in unemployment||
|Variation across States||
What are the consequences of rising unemployment?
- Reduced Family incomes
- Increased poverty levels
- Increased hunger: The Hunger Watch survey showed that 66% of surveyed households had less to eat even five months after last year’s lockdown.
- Increased debt levels- Households cope with this shock by borrowing, largely from informal sources, and selling assets.
- Weak consumer sentiment – demand shock – loss of mobility, low discretionary spending and inventory accumulation.
- Lower-than-anticipated economic recovery
Measures taken by governments to address the economic situation
- The Central government has announced that it will distribute 5 kg of rice and wheat for free to ration card holders across the country. Individual States have added to this.
- Karnataka has announced a ₹1,250-crore relief package, through which farmers, auto, taxi and maxi cab drivers, construction workers and other informal sector workers will receive varying amounts in the form of a one-time dole.
Connecting the dots: