Over 10 million Indians have lost their jobs because of the second wave of COVID-19, and around 97 percent of households’ incomes have declined since the beginning of the pandemic last year, Centre for Monitoring Indian Economy (CMIE) Chief Executive Mahesh Vyas said on Monday.
The unemployment rate measured by the think-tank is expected to come at 12 percent at the end of May as against 8 percent in April, Vyas told PTI, adding this signifies that about 10 million or one crore Indians have lost jobs in this period.
Stating that the main reason for the job losses is “mainly the second wave” of COVID-19 infections, Vyas said, “As the economy opens up, part of the problem will be solved but not entirely.”
He explained that people who lose jobs find it hard to get employment, specifying that while the informal sector jobs come back quickly, the formal sector and better quality job opportunities take up to a year to come back.
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Unemployment rate had touched a record high of 23.5 percent in May 2020 because of the national lockdown. Many experts opine that the second wave of infections has peaked and states will slowly start to ease the economic activity-impacting restrictions in a calibrated fashion.
Vyas further said an unemployment rate of 3-4 percent should be considered as “normal” for the Indian economy, hinting that the unemployment number will have to decline for longer before the situation improves.
He said CMIE had completed a nation-wide survey of 1.75 lakh households in April, which threw up worrying trends on income generation during the last one year which has brought two waves of the pandemic.
Only 3 percent of those polled said they had witnessed an increase in incomes, while 55 percent said their incomes had declined, he said.
An additional 42 percent of the people said their incomes remained the same as that in the year-ago period.
“If we adjust for inflation, we find that 97 percent of the households in the country have witnessed a decline in incomes during the pandemic,” he pointed out.
The labour participation rate, or the percentage of the working age population which is in the market, has come down to 40 percent as of now from the pre-pandemic levels of 42.5 percent, he added.