The recent surge in COVID-19 cases has sent the pandemic spiralling anew in the country, with its impact visible not just on the already strained healthcare infrastructure but also on the economic front – particularly the deteriorating labour market conditions.
As such, demands for a fresh economic package aimed at cushioning the blow of the pandemic and the subsequent shutdown measures on the marginalised groups have grown louder, with experts stressing that it must be treated as a “much needed relief” and not necessarily as a “stimulus”, unlike last year.
OVER 7.5 MILLION JOBS LOST IN APRIL
The devastating effects of the second wave of COVID-19 is evident from the unemployment figures, now available for the month of April. Notably, rising infection rates during the same period necessitated imposition of localised lockdowns, if not a national one, in most of the major metropolitan cities.
Over 7.5 million jobs were erased in the month of April, compared to March, according to the data compiled by the Centre for Monitoring Indian Economy (CMIE). Resultantly, the national unemployment rate in April registered a four-month high of 7.97% – with urban and rural joblessness at 9.78% and 7.13% respectively – as against the previous month’s figure of 6.50%.
This is despite that fact that the labour participation rate (LPR) in April this year is suggestive of not falling to a level lower than that of March. “The subsequent three weeks that ended April 11, 18 and 25 show an average LPR of about 40.1%. Therefore, unless there is an unusual bounce in the last week, the April LPR is likely to stabilise at its March level of 40.2%,” Mahesh Vyas, head of the CMIE had suggested in a blog post earlier last week.
Moreover, the employment rate fell from 37.56% in March to 36.79% in April, hitting a four-month low, according to a Hindustan Timesreport that quotes CMIE figures. As Vyas argued in the same blog post, this is so because “the April markets seem incapable of absorbing the supply of labour”.
‘CRITICAL’ SITUATION IN COUNTRY, SAY EXPERTS
All this points toward an economic situation that carries enough warning signs – according to labour experts – of a potential repeat of last year’s mayhem in the labour market post the nationwide lockdown. This is so especially if the governments fails to contain the virus outbreak from here on, leading to a chilling effect in bulk of economic activities.
“Economic activities do get affected when there’s fear among the people of going out and contracting the virus,” said Jayan Jose Thomas, a professor of economics at IIT-Delhi. It is true that unlike last year, there is no countrywide lockdown as yet in the country, he added.
“But there are localised lockdowns that covers most of the metropolitan cities thereby, impacting a large proportion of regular salaried workers and those who are self-employed. Above all, there’s a fear of shutting down of economic activities in other places that is also playing its role,” Thomas argued.
As on Tuesday, May 4, in the name of breaking the chain of transmission, lockdown is in place across Delhi, Karnataka, Haryana among others, with “lockdown-like restrictions” remaining enforced in Maharashtra. On the same day, India’s total infection cases also crossed the 2-crore mark with over 3.57 lakh new infections in the last 24 hours.
Anamitra Roychoudhary, professor at the Centre for Informal Sector & Labour Studies, Jawaharlal Nehru University, said that the country is in a “critical” situation currently. “In so far as the [CMIE] survey captures the ground reality, this [the April unemployment number] is still only the minimum of what has been recorded,” he told NewsClick, adding that the “present numbers would be slightly more than that”.
According to him, it is so as many of the migrant workers who have left their work cities very recently owing to either “joblessness” or the “fear of lockdown” among others would not have been recorded by the survey.
‘INSTITUTE MASSIVE SOCIAL SECURITY SCHEME’
Both Thomas and Roychoudhary opined that given the pressure, the Centre must soon announce a fresh relief package for the marginalised groups, especially if it is planning to impose a lockdown in the country, as is also now being urged by medical experts.
“The Centre must institute a massive social security scheme that can include cash doles or unemployment benefits in order to protect the livelihoods of the poor,” Thomas said. He added that the Centre can also “effectively intervene” by increasing investments in sectors like health and education.
Last year, in the month of May, the Narendra Modi – led central government had announced a Rs. 20 lakh crore stimulus package to address the pandemic.
Suggesting that it was “insufficient,” Roychoudhary argued that crucial lessons must be drawn from last year’s experience. “Any package at this point of a health crisis, must be treated as a relief to the marginalised and not necessarily as a stimulus to the economy,” he said.
Asked what he meant by this, he explained that the package must include more provisions for “assistance in terms of food supply and cash” rather than a “credit facility”.
“This is also significant from a narrow point of view to contain the virus and restrict the death toll. With food being taken care of and some cash in hand, those at the bottom of the economic ladder won’t be forced to fend for themselves, in other words, move out of their homes. That is what is required to break the transmission. Isn’t it?” he said.
Incidentally, the Supreme Court, too, on Monday urged the Central and the state governments to consider imposing a lockdown while adding that “arrangements must be made beforehand to cater to the needs” of “the marginalised communities”.
Earlier this month, 10 Central Trade Unions also wrote to Prime Minister Modi to press for a “universal free vaccination” drive along with a cash transfer of Rs 7,500 per month to all non-income tax paying families and 10 kg free food grains per person per month for a period of six months.