IMPACT OF COVID-19

ON EMPLOYMENT IN INDIA
MADE BY

 ABSTRACT

The present pandemic caused by COVID-19 has caused unprecedented turmoil in human lives.
Invoking the typology of crises, we classify COVID-19 as an intractable crisis that necessitated nations
to impose lockdowns.
At the end of April 2020, the number of COVID-19 infections had exceeded 2.8 million cases
worldwide, with the death toll nearing 195,000. The pandemic has now affected 210 countries and
territories. Full or partial lockdown measures were implemented all around the world, affecting
more than 5 billion people.

Unemployment is like a giraffe which is easier to make out than to describe. The unemployment
crisis has existed for a long time. Due to the COVID-19 led lockdowns in India, there has been a
devastating effect on the unemployment rate in India as most of the private companies have fired
their employees. The main sufferers of this lockdown are the informal sector employees as the
majority of them started losing jobs since construction works were closed. With no capital,
thousands of people deserted cities, marching to their homelands for several hundreds of miles
away in the absence of government transportation, which showed their intensity of anguish. This
work is an attempt to describe the impact of COVID-19 on unemployment in India and to decipher
how intrinsically wrong the policies are as well as the whole structure.
Further, the most affected areas in terms of unemployment emerged to be travel and tourism,
hospitality, the entire corporate sector, industrial and manufacturing sectors amongst others. On the
contrary, as the lockdown gradually started to loosen up, there were some sectors such as e-
commerce, retail, IT and the financial sector which saw increased hiring.
Along with that, an important part of the workers’ community is the migrant workers who constitute
quite a large proportion of such a vulnerable population. Millions of migrant workers were left
unemployed in India due to the lockdown and subsequent fear of recession.

Moving towards informal workers, we see that India has one of the highest numbers of informal
workers in the world, estimated to be around 75 to 90% of all workers. Informal workers have been
facing substantial economic losses due to the pandemic and subsequent lockdowns.
The overall performance of our economy depends on both the labour and employment markets. The
overall performance of the economy depends on both the labour and employment markets.
Recently, the rating agency Moody’s slashed its FY22 growth rate in India to 9.3% from the earlier
estimation of 13.7%.

All this burden of unemployment on one hand and meeting daily needs on the other often leads to
an increase in the amount of crime. Throughout history, unemployment and crime in a society have
had a certain correlation. This correlation has again emerged during and post this pandemic. As the
Indian economy slowed down and gradually moved into recession, crimes of all kinds rose
significantly. This has thus acted as evidence to the economic slowdown and the widespread
unemployment among most sectors. A comprehensive analysis and these findings have been further
elaborated in the report.

OBJECTIVE
The most serious problem the country is facing today is the problem of unemployment, the planners
and every other stakeholder have shown much concern about this and emphasis to remove
unemployment by increasing the growth rate has been cited. Although India is ranked among, the
first eight industrially advanced countries in the world, it remains by and large, underdeveloped. But,
as soon as ray of hope was emerging, the world got hit by COVID 19. The novel coronavirus
pandemic is considered a natural crisis, which extremely affects human psychology. Thus, the aim of
this study is to analyse the IMPACT OF COVID-19 ON EMPLOYMENT IN INDIA. The pandemic has
had a very significant effect on the already existing unemployment crisis and this study tries to bring
out those effects as effectively as possible.

 Introduction
To begin with, let’s first understand a simple definition and a few types of unemployment important
in the Indian context.

What is Unemployment?

Unemployment occurs when a person who is actively searching for employment is unable to find
work. Unemployment is often used as a measure of the health of the economy. The most frequent
measure of unemployment is the unemployment rate, which is the number of unemployed people
divided by the number of people in the labor force.

Types of Unemployment in India:

Disguised Unemployment: It is a phenomenon wherein more people are employed than actually
needed. It is primarily traced in the agricultural and the unorganized sectors of India.

Seasonal Unemployment: It is an unemployment that occurs during certain seasons of the year.
Agricultural laborers in India rarely have work throughout the year.

Structural Unemployment: It is a category of unemployment arising from the mismatch between

the jobs available in the market and the skills of the available workers in the market. Many people in
India do not get job due to lack of requisite skills and due to poor education level, it becomes
difficult to train them.

Cyclical Unemployment: It is result of the business cycle, where unemployment rises during
recessions and declines with economic growth. Cyclical unemployment figures in India are negligible.
It is a phenomenon that is mostly found in capitalist economies.

Technological Unemployment: It is loss of jobs due to changes in technology. In 2016, World Bank
data predicted that the proportion of jobs threatened by automation in India is 69% year-on-year.

Frictional Unemployment: The Frictional Unemployment also called as Search Unemployment,

refers to the time lag between the jobs when an individual is searching for a new job or is switching
between the jobs.

Vulnerable Employment: This means, people working informally, without proper job contracts and
thus sans any legal protection. These persons are deemed ‘unemployed’ since records of their work
are never maintained. It is one of the main types of unemployment in India. Social distancing
resulted in the job losses, specifically those Indian society’s lower economic strata. Several
households terminated domestic help services – essentially an unorganized monthly-paying job.

 Overview
The majority of the working population in the country belonged to the informal, unorganized sector
that had the lowest income jobs. India has millions of migrant workers who move seasonally for
prospective labor-intensive jobs that offer better pay than local employment. With no restriction on
internal migration within the country, supported by the vast road and rail infrastructure many
workers commute across districts for employment, sometimes even on daily basis.

The organized sector, however, included workers employed at government offices or government-
owned entities, state-owned enterprises, and the private sector. Regular jobs in the organized sector
provided better job security and earnings, besides being protected by labor laws. Employment and
retirement benefits included rent subsidies and medical allowances in addition to others, depending
on the sector of work. Indian Railways and Indian Armed forces are among the largest employers in
the world. However, a majority of the working labor are casual laborers and self-employed. To
provide equal representation of disadvantaged sections in society in education, employment, and
politics, the government has included reservations.

The country’s lockdown from the coronavirus (COVID-19) pandemic in March 2020 not only halted
daily life, but also had a drastic impact on most economic activities, causing financial stress on many
migrants and daily wage employees. A drop in India’s GDP forecasts as a result of COVID-19
accompanies a drop in industrial production due to decreased factory output in non-operational
factories across the country. Business and commercial activities came to a standstill, and many lost
their jobs. Amidst this work-from-home became the new norm for many professionals. This made it
clear that along with the economy, the pandemic created immediate and long-term disruption in
employment, with all sections of society at stake

 Unemployment Trend

India's unemployment rate rose to 23.5 per cent in the month of April amid coronavirus
lockdown. The rate of unemployment in urban India stood higher at 24.95 per cent as against rural
22.89 per cent. The lockdown had forced many industries to shut down which led to increased
levels of unemployment across the country.

India's unemployment rate dropped to 11 per cent in June 2020 from a record peak of 23.5 per cent
in the previous two months, when several companies resumed operations following weeks of corona
virus pandemic closures. The unemployment rate in metropolitan areas fell to 12.0 per cent from
25.8 per cent, while in rural areas it declined to 10.5 per cent from 22.5 per cent. This condition had
contributed to a loss of buying power in people's pockets. Without jobs or low-paying jobs and low
farm prices, people just didn't have the money to buy things. This decreased demand and, in
effect, also impacted the factory output and services market.

 Impact of COVID-19 on Employment in India

According to Centre for Monitoring Indian Economy (CMIE);

 The trickle-down effect Between February and April 2020, the share of households that
experienced a fall in income shot up to nearly 46 percent.
 Nearly half of formal salaried workers moved into informal work, either as self-employed (30 per
cent), casual wage (10 per cent) or informal salaried (9 per cent) workers, between late 2019
and late 2020 and there was a decline in their income level as well.
 Small traders and laborers were most impacted by the coronavirus (COVID-19) lockdown in India
with over 91 million people losing their employment in April 2020. Over 119 million Indians lost
their jobs, including entrepreneurs and salaried workers. In contrast, agriculture saw an addition
of five percent from farmers as compared to the fiscal year 2020.
 The unemployment rate around 12% at the end of May 2021 which translated into a loss of job
by 1 crore people during the period due to the 2nd wave of corona pandemic.
 The unemployment rate stands at 12.4%, urban 15.1% and rural 11.2% as of June 2021.
 Income of 97% households have declined since the outbreak of the pandemic.
 The index of actual hiring has come down from 132 in July-September, 2020 to 60 in January-
March, 2021.
 The automotive and FMCG sectors in tier-2 cities have performed poorly but the recruitment
situation in IT, Outsource, E-commerce, Pharma and Health Care sectors in metro and tier-1
cities have been quite stable.
 The gap between the intent of hiring and the actual hiring in markets was in early June’21 50%.

 Mobility curbs resulted in income losses because of decreased economic activity. A 10% decline
in mobility was associated with a 7.5% decline in income.

 Sectoral Analysis

The Covid-19 outbreak in India and the subsequent nationwide lockdown from March 25 altered
the landscape of the country’s employment sector. With close to 10.9 million jobs being lost
across sectors, 2020 was termed the worst-ever year for the job market in India.

Among the various sectors, aviation, hospitality and travel were the worst hit due to the
lockdown. Indians were forced to stay home and these sectors either sent their employees on
‘leave without pay’ or laid them off. However, the healthcare (due to Covid-19 related growth)
and education (e-learning) sectors saw a positive impact from the lockdown with close to 0.4
million new jobs being created in these segments according to industry estimates.
In total, HR consultants estimate that 1 million jobs were created in 2020, with the July-December
period seeing the highest recruitment. There is no centralised data available on the absolute
number of jobs lost or employment created in India. However, various surveys by recruitment
platforms and research agencies showed that the Unlock phase from June 2020 led to a partial
recovery, though the job market stayed volatile throughout 2020.

Data from the Centre for Monitoring Indian Economy (CMIE) showed that the unemployment rate
rose sharply, to 9.1 per cent, in December 2020. This is the highest unemployment rate since the
beginning of India’s recovery from the lockdown in June.

It is also a steep increase from the 6.5 per cent unemployment rate in November. CMIE said that
the unemployment rate was seen rising steadily in the weekly estimates during December. This
research said that the main reason for rising unemployment in December was the failure of the
farm sector to absorb the influx of labour.

Similarly, an outlook survey by jobs platform Naukri showed that the hospitality and travel sectors,
which were already on a year-on-year (YoY) decline in recruitment terms from 2019 onwards, saw
steeper dips in April 2020. This was on account of the lockdown and restrictions on movement.

Where the jobs were lost?

Among the 10.9 million jobs that were lost, 5 million were in the travel and tourism sector alone.

The worst hit job role was of travel agents and tour guides. It is estimated that 20 million people
work in the travel and tourism industry. The job roles involve sales, marketing, planning
itineraries, customer service and on-ground tour guide services. The travel/tourism sector
employees were among the worst hit because there was no safety net in companies, including
outplacement facilities or three months’ pay. Small travel agencies started to shut down by May
and employees were laid off end masse. Being a niche sector, it was also difficult for us for look for
alternative options for these workers.

Apart from travel, the restaurant and hotel industry were also badly hit. Covid-19 fears and
migration of workers led to eateries shutting down. Hotels were also forced to retrench staff in
the wake of almost ‘zero bookings’ (except quarantine facilities) in April and May 2020. Close to
3.5 million jobs are estimated to have been lost in these two segments. Hotels reported a 45.3 per
cent decline in their revenue-per-available room in the January to June period from a year ago.The
Indian hospitality industry’s market size is estimated to be $10 billion and it is said to employ 35
million people.

An allied industry is the automobile/transport sector, which saw several drivers of private
transport (buses, taxis) being laid off due to schools being shut and corporate employees working
from home. Close to 1 million such drivers/cleaners were out of jobs due to the extended shift to
working from home. In fact, 150,000 school bus staff lost their jobs and haven’t yet received any
financial relief as per the Bus & Car Operators Confederation of India (BOCI) & School Bus Owners
Association.

Due to the lockdown, while online grocery shopping and e-learning picked up, offline retail
suffered a blow due to malls being shut. This led to about 200,000 retail employees across
departmental stores and high-street fashion brands losing their jobs between March and June
2020.

However, once India entered the Unlock phase, the retail sector started hiring again.

Gigs in demand

Gigs are short-term job roles that are offered based on seasonal demand. Industry sources say
that close to 75,000 jobs are on offer on a temporary basis, led by sectors such as e-commerce,
offline retail, IT/ITeS and the financial services sector.

Companies such as Ola, Uber, Swiggy, Zomato, Flipkart and Amazon are among the large players
offering gig roles.

While gig jobs are contractually supposed to be short-term, several companies either extend the
contract after every 3-6 months or absorb these workers in a permanent position .

Where were jobs created?

On the one hand, several thousand jobs were lost but newer roles started to emerge due to the
‘new-normal’ of remote working. Digital interactions became more frequent, as a result of which
roles in areas such as cyber-security and data privacy, apart from IT backend support, were in
demand.
Among sectors, the biggest gainer was the healthcare sector. Health and pharma were in demand
due to the pandemic and these companies/institutions ramped up their staff strength .

Close to 270,000 jobs were created in the healthcare sector. Nurses were the most in demand
followed by in-house doctors for corporates, ENT specialists, pharmacists and medical directors. At
pharma companies, microbiologists and infectious disease experts were the most in demand.

A report by Naukri said that that medical and healthcare saw an immediate sequential recovery of
90 percent in hiring in May 2020.
Medical/healthcare companies in search of professionals on Naukri.com include Fortis, Apollo
Hospitals, Religare, Bayer Group, Mankind Pharma and Wockhardt Hospitals, among others.

Since schools and colleges were shut and online classes were being held, edtech companies gained
the most during 2020. Industry sources said that close to 130,000 jobs were created in the
education sector, led by online companies.

Companies such as Ola, Uber, Swiggy, Zomato, Flipkart and Amazon are among thlarge players
offering gig roles

Here, companies such as upGrad saw a big spike in the number of employees amidst the online
boom. upGrad was among the first to revoke salary cuts initiated earlier. Its employee strength
also grew to 2,000 (in November) from 600 at the beginning of the financial year.
In fact, global edtech funding crossed the 2019 mark in September 2020 itself. Ed-tech startups
have raised $4.89 billion across 377 rounds as of September 2020, according to a report by CB
Insights, a market intelligence platform.
Here, India’s Byju’s was second (China’s Zuoyebang being first), having raised $1.5 billion from
Tiger Global Management, DST Global and Silver Lake Partners, among others.

 Impact of Labour Force Migration

When large-scale population migration occurs as a direct result of a health crisis, the movement
mostly tends to be internal, temporary and early on in the health crisis. It generally happens to
regions directly outside the immediate crisis zone, and mostly happens because of
misunderstandings and panic, including financial crisis or fear of losing job.

Whether it is economic recession or an epidemic like COVID-19, migrant workers in large cities are
forced either to stay in perilous conditions in the urban areas, or go back to their places of origin—
villages or smaller towns. Initially, they change from becoming providers of remittance incomes to
their households, to becoming dependents of these households.

The impacts are most troubling for low-income households, which are less well positioned to cope
with earnings losses during a recession, have no alternative earnings and have no social security
available. Most of these workers earn little more than a subsistence wage and have no other means
to protect their incomes if they lose their jobs.

Migrant workers constitute quite a large proportion of such a vulnerable population. Millions of
migrant workers were left unemployed. Many of the migrant workers returned to their villages,
others who could not tried their best to and many had to pay in terms of their lives because of lack
of relief measures available to them. The risk of unemployment was particularly higher for those
working in unorganised sectors, and those who do not have written contracts, or those whose
contracts were at the verge of completion.

The lockdown and the subsequent recession hit the contract workers across every industry. On one
hand, lockdowns and social distancing measures are dried up jobs and incomes, they also disrupted
agricultural production, transportation systems, and supply chains on the other. This posed a
challenge of ensuring food security and controlling already rampant malnutrition, particularly among
children.

Many of these migrant workers come from the most depressed and backward regions of the
country, where there is currently little potential for employment and education. In this way, any
health or economic crises at the destination also increase return migration to origin communities.

A number of migrant workers who left the big cities during the crisis may never return, preferring to
drag out a living on their marginal farms or find work in nearby towns. It would deprive industrial
centres such as Delhi, Gurugram, Surat and Tiruppur, Mumbai, etc. of labour for a long period of
time, resulting in temporary shortage of human resources in the industries.

 Predicted Global Recession

Due to a wide and sudden spread of COVID-19, the world economy faces the thread of a serious
recession.
  The Organization for Economic Cooperation and Development (OECD) forecasted that in a
best-case scenario, its fallout would slash global growth by half a percentage point (Lowrey,
2020).
 Similarly, bodies such as the International Monetary Fund (IMF), the World Bank and the
Secretary General of United Nations also predicted global recession and significant economic
crisis in many countries (Business Today, 2020, April 3).
 The threat of recession is particularly important for India, as the pandemic came at a time
when the country was already facing problem of economic slowdown. Early estimates by the
government suggest that there will be a hit of 0.3–0.5 per cent on the GDP in the next fiscal
year, and growth in the first two quarters of the next fiscal could be as low as 4–4.5 per cent
(Economic Times, 2020, March 17).
 Sectors such as tourism, aviation, hospitality and trade will be severely affected, and these
sectors would be the first to face the impact.
 According to the International Monetary Fund (IMF), micro-, small- and medium sized
enterprises (MSMEs) and the services sectors are likely to be among the most affected due
to reduced consumer spending. Fitch has cut GDP growth forecast for India to 2 per cent for
the fiscal year ending March 2021, which would make it the slowest growth in India over the
past 30 years (Business Today, 2020, April 3).

 Impact of Recession on Workforce

There have been evidences in the past about how a recession affects the workforce.

During the global financial crisis of 2008–2009, an estimated 22 million people had lost their jobs,
according to the International Labour Organization (ILO).

India, like many other countries of the world, had to face recession in 2009.

A study carried out by the United Nations Development Programme (UNDP; Kumar et al. 2009)
revealed some facts about how that recession impacted the migrant workers in India.

a. According to UNDP, job loss was around 40,000 for engineering, 100,000 for gems and
jewellery and 500,000 for garments. Of these, engineering job losses were spread
throughout India; the gems and jewellery ones were especially located in Gujarat; and the
garments losses were located mostly in Ludhiana and Tirupur.
b. Around 20,000 construction workers lost their jobs in the Gulf. Overall, these 184 Journal of
Health Management 22(2) job losses were more in the unorganised sector.
c. The experiences of the recession of 2009 suggested that downsizing adversely affects those
who are employed in unorganised enterprises and those who are employed in organised
enterprises, but whose employment contracts are of informal nature (Kumar et al., 2009).

Another study on the impact of recession in Kerala (Zachariah & Rajang, 2010) indicated that

a. more than one-fifth of the emigrants returned home because they lost their jobs due to the
financial crisis, while another 3.3 per cent came because they were compulsorily repatriated.
b. Another 11.5 per cent of the emigrants reported that they returned home because their
contract had expired and was not renewed.
 c. Adding up all, the total percentage of emigrants who returned home owing to the economic
recession was around 36 per cent (about 63,000 emigrants) in the state of Kerala.

The recession due to COVID-19 appears to be more serious than what we faced in the 2009
recession. The ILO has estimated that up to 25 million people might become unemployed
worldwide due to the impact of COVID-19, ranging between 5.3 million job losses on a ‘low
scenario’ and 24.7 million on a ‘high scenario’ (ILO, 2020). The impact may differ from country to
country.

 Impact of lockdown measures on the informal economy

Informal workers have been facing substantial economic losses due to the pandemic and subsequent
lockdowns

For most of the 2 billion workers and business owners in the informal economy, stopping work or
working remotely from home is not an option. Staying home means losing their jobs. For many, it
also means losing their livelihoods. “To die from hunger or from the virus” is the all-too-real dilemma
faced by many of those earning a living in the informal economy.

Taking into account the additional effects of sectoral risk, employment status, the size of enterprises
and different levels of lockdown measures (full, partial and weak measures), leads to an even larger
estimate of the impact of COVID-19 on informal economy workers. This estimate suggests that
almost 1.6 billion informal economy workers or 76 per cent of informal employment worldwide are
significantly impacted by the lockdown measures and/or working in the hardest hit sectors (Figure
1).
Among informal economy workers significantly impacted by the crisis, women are over-represented
in high-risk sectors: 42 per cent work in those sectors compared to 32 per cent of men (Figure 2).
The difference by gender is the highest in upper-middle income countries, where women are largely
overrepresented in the manufacturing and wholesale/retail trade sectors compared to men. There
are at least two main reasons why such a high proportion of informal workers is affected by
lockdown measures.

The first is sectoral: the sectors in which they are largely represented are also the hardest-hit. The
second has to do with size: the majority of the 2 billion workers in the informal economy labour as
own-account workers and in small firms of less than 10 workers, which are more vulnerable to
shocks.
The impact of the crisis and lockdown-associated measures differs depending on the sector. The
largest sectors and sub-sectors in the informal economy are often those that are directly impacted
by COVID-19 and associated measures to ensure physical distancing.

Heavily impacted sectors include the wholesale/retail trade sector, which accounts for one fourth of
informal non-agricultural employment globally and one third in developing countries, where the
majority of those employed in the sector are street vendors.

The agriculture sector accounts for a large proportion of informal employment (40 per cent of
informal employment worldwide and two thirds in developing countries). Despite being considered
low-medium-risk, as many as 500 million workers in this sector are seriously affected, unable to sell
their products on urban markets.

With further increases in income inequality among workers, an even greater proportion of informal
economy workers will be left behind. Assuming a situation without any alternative income sources,
lost earnings would result in an increase in relative.
  Criminal activities on the rise

Clear evidence of the unemployment caused by the pandemic in India is the much evident rise in
criminal activities. The economic recession has pushed a lot of people into extreme poverty and
unemployment. This is also shown by a cross-national study by the United Nations Global Pulse
Initiative that draws a correlation between the changes in these economic indicators with
associated changes in recorded crime. In contemporary societies, poor financial conditions are one
of the leading causes of stress-induced crimes. Higher levels of unemployment are often
accompanied by poor working conditions, decreased social spending by governments, and
increased prices of consumer goods — as has also been witnessed in India.

In the wake of these occurrences, there has been an alarming rise in domestic violence, labour
disputes, social security benefits and insolvency. The limited operativity of justice systems,
because of the lockdown measures, has further exacerbated the situation.

Individual crimes
In India, the lack of jobs has pushed many people into criminal activities as unemployment
rates have grown exponentially from 7 per cent before the lockdown to a peak of 27.11 per cent in
April 2020. Overall, labour force participation has also decreased from 43 per cent in January 2020
to 40 per cent in November indicating that people have been staying out of the job market; a
problem compounded by the unemployment crisis.

A study on criminal activity analysing incidence of FIR reporting in Bihar, the state with the lowest
population to police ratio in the country, compares crime rates in the COVID-19 pre-lockdown,
lockdown, and post-lockdown periods. The results show that as the lockdown transitioned to a
phased system with certain areas being classified as high restriction red zones and others as low
restriction orange and green zones — there was a higher incidence of economically motivated
crimes in the red zones attributed to the higher number of job losses and business closures.

Apart from the financial strain, the social containment of people due to the shelter-at-place orders
brought about by the global health crisis also influences the observed criminal misconduct of
people. With more time being spent at home during the COVID-19 pandemic, there is a greater
scope for crimes like domestic violence and child abuse. The pandemic has also aggravated
violence against other vulnerable societal sections such as the LGBTQ people, the elderly, and
those in deep poverty. In India, Google search trends for “Domestic abuse” and “Domestic
violence helpline” were peaking during the initial 68-day lockdown period in which there has been
an increase of 100 percent in the calls for help and request for relief shelters in domestic
violence cases during the last week of April from the first week of March, as reported in the 2020
UN Human Development Report. The number of reported domestic violence cases in India, which
only account for 14.3 per cent of the total cases, is also at a 10-year high.
Organised crime
The very nature of organised crime is highly adaptable, which it has demonstrated with its ability
to extract long-term gains from crises such as the end of the Cold War or the global economic
crisis of 2009. The Financial Action Task Force (FATF), an intergovernmental organisation
committed to combating money laundering and terror financing, has recently issued warnings
about an expected rise in anti-money laundering crimes due to risks associated with remote work
and online sales. India’s National Security Advisor had said that, “financial frauds have seen
exponential increase due to greater dependence on digital payment platforms.”
The FATF have also predicted an increase in cybercrimes. These include ransomware by enticing
anxious victims to click on links promising anti-coronavirus remedies and exposing their devices to
remote control and hacking.

Additionally, criminals have reportedly impersonated government officials or used other phishing
techniques to obtain personal or financial information, held fundraising for fake charities helping
COVID-19, and enabled fraudulent investments into fake companies promising a cure for the novel
coronavirus. Between February and March 2020, Interpol reported a 788 per cent growth in high-
risk website registrations globally, whereas a cyber security firm reported a 600 per cent increase
in phishing mails only in March 2020. It is estimated that cybercrimes will cost the world economy
US$ 6 trillion in 2021. Also, the number of cyberattacks that originated in India had more than
doubled to 2,299,682 incidents in Q1 2020 as compared to 854,782 in Q4 2019. To tackle the
upward trend of cybercrimes, Delhi Police has trained 1,300 additional personnel to manage the
increasing cyber threats.

The immense financial strain on legitimate businesses swirling towards bankruptcy in various
sectors such as tourism, manufacturing, and food presents organised crime syndicates with the
opportunity to penetrate the legal economy by gaining direct or indirect control of failing
businesses through exorbitantly expensive loans. With more people moving their money out of
the financial system due to economic uncertainty, criminal organisations will increasingly utilise
this opportunity to propagate cash-dominated unregulated financial markets with credit lines to
fund businesses while attempting to capitalise on the plight of the unemployed and vulnerable
to expand their base and recruit new members.

There are examples of organised crime syndicates taking advantage of the shortages in medical
supplies by leveraging their existing supply chain of counterfeit products to distribute substandard
protective equipment like masks and sanitizers, jeopardising the health of their users in Indian
cities. An international operation conducted by Interpol in 2020 led to the seizure of over four
million potentially dangerous pharmaceutical products worth US$ 14 million. Additionally, fake
COVID-19 vaccines are being sold on the internet. There has also been an increase in organised
property crimes during the pandemic with the use of real estate as a front to layer illicit funds, a
method popular in the criminal underground.
  Expected employment recovery after First wave v/s Second
Wave

India’s economic recovery from Covid-19 shocks is V-shaped!

The recovery from the first Covid-19 shock of early-to-mid 2020 was V-shaped. But it is now
becoming increasingly clear that the recovery from that serious setback will not get India’s real GDP
to where it was before the shock even by the end of March 2022.
 The labor participation rate remains 2.7 percentage points lower than its pre-covid levels.
 The employment rate remains 3.3 percentage points lower than the pre-covid levels.
 The unemployment rate shot up from 7.8 per cent in the quarter ended March’20 to nearly 24
percent in April’20.
 Followed by 17.8 per cent in the quarter ended in June 2020. A quick recovery to 7.3 per cent in
the quarter ended September 2020.

The recovery was incomplete because the employment rate, which is the working age population
that is employed, never returned to its pre-Covid levels.

The employment rate was 39.2 per cent in the quarter ended March 2020. It fell to 31.5 per cent
during the pandemic quarter of June 2020 and recovered in the famous V-formation in the next
quarter July-September 2020 to 37.7 per cent. Then, it was unable to complete its recovery and
remained around that level till the second wave hit India in April 2021.

CPHS indicates that a V-shaped recovery is underway again after the second wave of Covid-19 that
struck India in April. According to the weekly June’21 data published:
 In January 2021, India saw an unemployment rate of over six percent. This was a significant
improvement from the previous month.

 The data shows that the employment rate was 37.6 per cent in March 2021 before the second
wave descended.
 During 2nd wave, the employment rate fell to 36.8 per cent in April’21 and then further to 35.3
per cent in May.
 The rate fell to 33.6 per cent by the week ended May 23, 2021 and remained close to 34 for
some time.
 The four weeks from May 10 through June 6 were the worst hit by the second wave. The
employment rate averaged at 34.5 per cent during this period. The recovery since that trough
has been quick.
 The Employment rate sprung back to 36.3 per cent during week ended June 13. As of the week
ended July 25, the employment rate was 38.2 per cent.
 The LPR rose to 41.1 per cent in the week ended July 25 from 40 per cent or lower in each of the
preceding three months. The steady rise of the LPR through most of July implies a greater
demand for jobs.
 The unemployment rate fell from 7.3 per cent in the week ended July 4 to 6 per cent in the week
ended July 18. As the LPR jumped to over 41 per cent in the week ended July 25, the
unemployment rate shot up to 7.1 per cent.

Had the pandemic not occurred?

Poverty would have declined by 5 percentage points in rural areas and 1.5 percentage points in
urban areas between 2019 and 2020, and 50 million would have been lifted above this line.

 Actions that can help improve the situation

 Improving small-scale industry segment of the economy.
 Self-employment should be given more emphasis.
 Educational pattern should be completely changed.
 Emphasis should be given on vocational education.
 Qualified engineers should start their own small units
 Decentralization of Industrial production to create employment opportunities in
underdeveloped areas .
 Accessible financial aid, raw materials and professional preparation should be made easier.
 Improve job prospects and labor productivity.
 Education should be given more priority in five-year plans.
 Population growth should be reviewed.
 Family planning policy should be uniformly and efficiently enforced.
 Proper process to ensures efficient use of available resources.
  CONCLUSION

The majority of the working population in the country belonged to the informal, unorganized sector
that had the lowest income jobs. India has millions of migrant workers who move seasonally for
prospective labor-intensive jobs that offer better pay than local employment. With no restriction on
internal migration within the country, supported by the vast road and rail infrastructure many
workers commute across districts for employment, sometimes even on daily basis.

The organized sector, however, included workers employed at government offices or government-
owned entities, state-owned enterprises, and the private sector. Regular jobs in the organized sector
provided better job security and earnings, besides being protected by labor laws. Employment and
retirement benefits included rent subsidies and medical allowances in addition to others, depending
on the sector of work. Indian Railways and Indian Armed forces are among the largest employers in
the world. However, a majority of the working labor are casual laborers and self-employed. To
provide equal representation of disadvantaged sections in society in education, employment, and
politics, the government has included reservations.

The country’s lockdown from the coronavirus (COVID-19) pandemic in March 2020 not only halted
daily life, but also had a drastic impact on most economic activities, causing financial stress on many
migrants and daily wage employees. A drop in India’s GDP forecasts as a result of COVID-19
accompanies a drop in industrial production due to decreased factory output in non-operational
factories across the country. Business and commercial activities came to a standstill, and many lost
their jobs. Amidst this work-from-home became the new norm for many professionals. This made it
clear that along with the economy, the pandemic created immediate and long-term disruption in
employment, with all sections of society at stake.

 METHODOLOGY
The research is a literature-based study investigating the current issue of ‘Impact of COVID on
unemployment in India’. We have also relied on secondary data from various books, journals, and
authentic websites. The data (Charts, Tables and Diagrams) in the study has been analyzed properly
& included only after extensive internet study.
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