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LATEST NEWS UPDATES | COVID-19 Driving Up Unemployment -Gyan Pathak

COVID-19 Driving Up Unemployment -Gyan Pathak

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published Published on May 12, 2021   modified Modified on May 13, 2021

-Newsclick.in

As India faces a grim economic scenario due to the second wave of the pandemic in India, the government needs to step in to create employment opportunities.

The second wave of COVID-19 beginning from February 2021 has not only severely impacted the economic recovery in India, but has also threatened a contraction in its GDP and consequently a sharp spike in unemployment. S&P’s moderate and severe severe downside scenario has estimated a hit of 1.2 – 2.8 percentage points to India’s growth, and the latest CMIE’s 30-day moving average puts the unemployment rate at 8.2 per cent as of May 9, 2021, an increase of 2.5 per cent compared to the previous month.

We saw an upward trend in economic recovery from October 2020 until the outbreak of the second wave of the pandemic, which caused severe disruption in the economic performance of the country due to fresh containment measures, curfews, and local lockdowns. It could result in a contraction at least during the present quarter April-June 2021.

If the second Covid wave is not contained, the economic performance for the whole year may be impacted. In a moderate scenario, S&P has an estimated growth of 9.8 per cent as against the budget estimate of 14.4 per cent.

Unemployment in the country in the last year since May 2020 has been fluctuating on a month on month basis until January 2021. It means that in one month people are getting employed and the next month they end up losing it.  However, since the beginning of 2021, it has worsened. The unemployment rate in January was 6.52 per cent which rose to 7.97 per cent in April, and 8.2 per cent on May 9. For urban India, it was 9.78 in April, but in rural India, it was 7.13. The condition further deteriorated for urban areas to 10.54, and for rural areas, there was a minor improvement to 7.04 percent on a month on month average basis as per CMIE data.

The latest trend shows unemployment in the urban areas has been worsening faster than in the rural areas.

The situation is alarming for both areas but the situation in urban areas would be more difficult to handle due to the shutting down of economic activities in recent weeks. It is likely to worsen further.

The highest unemployment rate in April 2021 was in Haryana at 35.1 per cent, followed by Rajasthan 28, Delhi 27.3, and Goa 25.7 per cent.

Jharkhand and Tripura had an unemployment rate of 16.5 and 17.3 percent respectively, while Bihar, Himachal Pradesh, Jammu and Kashmir had over 11 per cent. West Bengal, Uttarakhand, Uttar Pradesh, and Kerala had over 6 percent of unemployment. It indicates a worsening situation across India.

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Newsclick.in, 12 May, 2021, https://www.newsclick.in/COVID-19-driving-unemployment?fbclid=IwAR0PkY5_1kBHENWH0I0aPK_fThI6isr80LsE5Kg13TZ-RyL5LarI1xcEiWo


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