Unemployment rate rises as Covid-19 returns to haunt Indian economy | Daily Current Affairs 2021
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Unemployment rate rises as Covid-19 returns to haunt Indian economy

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Job losses have started hitting the gig economy with a sharp rise in Covid-19 cases during the second wave. A private research report suggests that the unemployment rate has started rising since April.

Fresh restrictions imposed in different parts of the country due to the second Covid-19 wave could lead to job losses, similar to what was witnessed in 2020.

Data released by the Centre for Monitoring Indian Economy, a Mumbai-based think tank, suggested that unemployment has again started rising in the country. The unemployment rate touched 8.6 per cent for the week ending April 11, from just 6.7 per cent two weeks ago, according to fresh data released by CMIE.

With migrant labourers retreating to their native places, the impact seems to be more severe in urban areas where the unemployment rate is now reaching 10 per cent.

Maharashtra, which has been reporting the highest number of cases in India, was the first to announce partial lockdown measures. State authorities said that a decision on a complete lockdown will be taken this week.

Other states have also imposed restrictions like night curfews and may soon opt for stricter measures if average daily cases continue to rise rapidly.

On Monday, India reported a daily spike of over 1.6 lakh cases and overtook Brazil to become the second worst-affected country in terms of total cases reported.

Economists fear that the rising cases could severely impact businesses and will lead to a sharp rise in job losses. The overall impact could significantly delay India’s economic recovery.

WHAT HAPPENED LAST YEAR?

The strict nationwide lockdown to contain the virus spread had led to widespread devastation in 2020. The unemployment rate shot up sharply as millions of gig workers were rendered jobless due to the lockdown.

The lockdown had not only impacted gig workers, but many white-collar jobs were also lost, especially in sectors like aviation, tourism, travel and hospitality. While many companies had cut jobs, others opted for pay cuts.

Household incomes fell sharply as a result of jobs losses and subsequently led to a critical demand crisis. While some jobs have been restored, India’s employment level is far from what it used to be before the pandemic in 2020.

If the resurgence of cases is not contained soon, the damage to the recovering economy could be catastrophic, according to several business owners who are now seeking strict Covid-19 protocols instead of complete lockdowns.

Source: Indiatoday

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