The coronavirus pandemic has changed the lives of many. Millions have been left jobless and once the growth levels fall, the fact that there is no activity, it is going to massively cost Indians in terms of their jobs. It may be noted that the unemployment rate in the nation has jumped by nearly three-fold amid the lockdown announced to combat the spread of the deadly virus.
According to the data released by the Centre for Monitoring the Indian Economy (CMIE), the unemployment rate in urban areas increased to 30% in the week ending March 29, about 3.5 times the rate of 8.7% for the week ending March 22. For rural areas, the corresponding figures were 21.0% and 8.3%. The overall unemployment rate increased from 8.4% to 23.8%. The unemployment rate is estimated to rise further to 30.9% for urban areas, 20.2% for rural areas and 23.4% at the all-India level.
We wonder where will things really stand if there is no economic activity? As May 3 draws closer, its time for the government to look at ways of lifting lockdown 2.0. While the government debates over lives vs livelihoods, it’s jobs that are emerging to be the biggest casualty of the pandemic. India’s employment rate during the lockdown period ranges between 21% and 26%.
According to data, the shutting down of businesses have seen 72 million people quit the labour market already. A report by SBI research reveals that the retail sector is expected to take the biggest due to the lockdown potentially leaving 11 million people without job.
Other sectors that are expected to see layoffs include ride-hailing services, restaurants, e-commerce and tourism. SME’s and startups too are proving to be another most vulnerable sectors as weak supply chains and limited access to capital are making business difficult. According to data from the State Bank of India, the hospitality industry, valued at Rs 390 billion, and employing around 10 million people, has already shed approximately half a million jobs.
Companies like OYO, Swiggy, Treebo and Fab Hotels have already started handing out pink slips. Another survey has revealed that 61% of SMEs are looking at scaling down operations which may eventually lead to more layoffs. IT majors have also put a hold on fresh hiring. Infosys COO UB Pravin Rao said, “In terms of hiring we will honour all the commitments made both to campuses as well as lateral(job) offers. We are not really looking at COVID-19 related layoffs. But some performance related exits.”
Wipro’s HR Head said, “We will honour all campus offers. Onboarding may be deferred. We have many options, people can go on leave, furlough. We will monitor the situation on a week to week basis.” “Every offer that we have made will be honoured. We don’t see any retrenchments. We have decided to not give any salary hikes this time,” said Rajesh Gopinathan, MD & CEO, TCS.