In May, at least 15.33 million Indians lost their jobs, wiping out gains made since July 2020, posing a risk to consumer spending and economic recovery.
According to the Centre for Monitoring Indian Economy, the number of people employed fell to 375.45 million in May from 390.79 million in April (CMIE). As the second wave of the pandemic infected millions of Indians and states imposed lockdowns to stem the spread of the virus, the number of people employed in salaried and non-salaried jobs fell by nearly 23 million in April and May.
The number of people who are unemployed but actively looking for work increased by 17 million to 50.72 million, indicating a willingness to work but a lack of opportunities.
The pandemic’s impact on salaried jobs, on the other hand, is relatively minor and largely limited to urban India. People who own businesses, small traders, and daily bettors, on the other hand, bore the brunt of the pandemic’s economic disruption.
In April, 127 million people worked in small trades and daily wage jobs, but that number fell to 110 million in May. In May, at least 9 million more people began working in agriculture, bringing the total number of people employed in agriculture to 123.7 million. In May, however, 1.22 million salaried jobs were lost in urban India, while a little more than 1.4 million salaried jobs were gained in rural India.
“The job market was stretched since last year’s lockdown. The situation was looking up between December and March, but the second wave has done more damage. What we are not realizing is that the job loss is squeezing private demand. People losing jobs will impact revival. If the consumer does not have income, he or she won’t spend,” said Arup Mitra, a professor of economics at the Institute of Economic Growth.
“Non-farm opportunities have shrunk in rural India, and there is a surplus workforce there. People are getting engaged in farming, meaningful or not, is a separate debate. It also means more people are doing the same work, which means lower productivity and less income,” said Mitra.
