The 21-day lockdown induced by the deadly outbreak of the Covid-19 has completely dismantled and disrupted the entire job market in India. It seems that the damages could be so severe that it could lead to large scale unemployment the country has not faced for decades.
A recent estimate by the National Sample Survey (NSS) and Periodic Labour Force Surveys (PLFS) depicts that nearly 13.6 crore jobs are now on the fence for unemployment. They also reported that India, considering the unemployment rate started increasing before the Covid-19 outbreak hit the economy, needed to add a whopping 10 million new jobs every year to employ the working-age population.
Expressing her concerns on the same, Sabina Dewan who is the President and Executive Director of the think-tank JustJobs Network said “The implications of this crisis will be dire. We will inevitably have less fiscal space to make much-needed investments in, for example, education, skills, preventative healthcare, and infrastructure. This will not just prevent us from moving forward but will set us back. Our large and growing youth population will be further disenfranchised, potentially spurring social discord, crime, and instability.”
It is the gig economy which is expected to be impacted heavily by this current situation. It includes contract workers, small businesses and casual labourers who are often employed without a fixed salary and a legal contract in place. It has been found out that an astounding 5 crore Indian citizens have contract jobs which are less than a year in tenure.
Indeed which is a popular job search platform recently conducted a survey which concluded that various freelancers and contractual workers are now being trimmed so that businesses can keep their operational overhead costs low. It has also been found out that hiring activities will be temporarily halted by a third of companies.
Here is an overview of the job market scenario in the most adversely impacted sectors by the Covid-19 in India.
Aviation Sector: Contractual Jobs At Risk
Airlines is one of the primary and most obvious worst affected sectors because it has come to a complete standstill with both domestic and international travel being barred after the announcement of the lockdown. Recent estimates have shown that nearly 600,000 contractual workers who fulfil on-ground and support roles in the aviation industry now stand to lose their jobs.
“Indigo, India’s largest airline, has reported a 15-20% decline in daily bookings over the past few days, compared with the week-ago period, and expects its quarterly earnings to be materially impacted,” Kapil Kaul, chief executive for aviation consultancy CAPA India told ET.
IndiGo, GoAir and Spicejet have already cut the salaries of employees – including the chairman – for the month of March.
Manufacturing Sector: Over 9 million Jobs Impacted
The 21-day nationwide lockdown has also brought a lot of civil projects related to manufacturing and production to a complete standstill as well. Adecco Group which is temporary staffing provider has reported that over 9 million jobs are now at risk in the manufacturing space which includes everything from food products to electronics to cement and ceramics. For example, due to production delays the handset manufacturing industry very recently suffered a total loss of ₹15,000 Cr.
“At present, we have a turnover of ₹500 crore to ₹700 crore per day. So, a shutdown for about three weeks essentially means a loss ranging between ₹10,000 crore and ₹15,000 crore,” Pankaj Mohindroo, chairman of the Indian Cellular & Electronic Association of India (ICEA) told ET. ICEA represents smartphone manufacturers including Apple, Oppo, Lava and more.
A recent report by The Wall Street Journal noted that Apple didn’t have plans to produce its flagship iPhone 11 in India anytime soon and would continue to rely on China for its production – despite the Covid-19 outbreak that affected many factories.
Automobile Sector: Million Jobs On The Fence
Coming to the automobile industry, which for the last year has gone through a dip in sales figures and an increase in production costs is now all geared up to suffer even harsher conditions due to the outbreak and the lockdown. A million jobs across the country related to dealerships and frontline workers among others are now at risk.
The Auto industry is all set to get impacted by losses worth over ₹13,000 crore due to the forced shutdowns and as the industry contributes around 7.5% to India’s overall GDP, it will also end up putting a huge dent in the Indian economy as a whole.
Measures To Curb Unemployment
It has been reported that the Central Government is planning to give unemployment benefits to a section of organised workers via the Atal Beema Vyakti Kalyan Yojana (ABVKY) because of the same.
Under this particular scheme operational since July 2018 and which can be availed only once in a lifetime, unemployed workers can avail compensation in cash up to three months of unemployment.
However, it is very obvious that the coverage of this scheme is very limited and it can’t possibly compensate for the magnitude of the entire workforce which has been affected due to the Covid-19. Therefore, it is important that the Indian government comes up with a scheme which is more universal and inclusive in nature to deal with this challenge of unemployment the nation is facing at this moment.
