Current Unemployment Scenario in India

The devasting effect of the second wave of covid-19 can be seen in India by the increasing unemployment rate. Thus, hitting the Indian economy badly.

The unemployment rate Risen to 9.1 in December 2020 as per Centre for Monitoring Indian Economy (CMIE) data and decreased to 6.5 percent in January. According to the experts, from July onwards the CMIE data indicated up-gradation in unemployment. Still a Consistent need is required which will only be possible by the growth in the manufacturing and service sectors. Not only this, experts believe that the job losses may be long term in nature

India also registered a higher unemployment rate compared to United States, United Kingdom, and Germany between 2015 and 2019, the report said.  However, the US had a higher unemployment rate as compared to India in 2020 (8.31 percent). The United Kingdom and Germany had unemployment rates of 4.34 percent and 4.31 percent, respectively.

GDP Fall : Unemployment in India

The employment rate faced a four-month low from March to April. That is from 37.56% to 36.79%. The monthly data also indicated the job search by the people along with previously unemployed people also increased. Increasing from 1.60crore to 1.94 crores in a span of March to April.

According to The Economist, the pandemic pushed the current job crisis more. As several industries and small businesses added to a tight spot to find their roots in pre-pandemic time. Economists believe the root cause of the unemployment lies in pre-pandemic times such as the demonetization of Rs500 and Rs1,000 notes in 2016 which slowed down the demand for jobs. The second main reason could be the poor implementation of the tax regime which affected the small business. Due to the reason above the economy was already dealing with a lack of growth and active unemployment in covid -19. The implementation of a new tax regime affected small and medium enterprises. The goods and services tax by the government hit these small and medium industries. They almost provide 110 million non-farmers laborers the employment.

This jump up in unemployment, inflamed by the pandemic led lockdowns, threatens to translate into a “vicious cycle” of a severe economic shutdown. The real GDP or Gross Domestic Product reported a 23.9 fall from its 2019 level. Thus marking wiped country’s economic activity by the Global demand. Also includes collapsed domestic demand campaigned by the series of strict national lockdowns.

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Some steps should be taken by the government to decrease unemployment like :

  • Providing income support to the skilled yet unemployed people
  • Supporting the small-scale industries that provide employment to small rural families. So that the industry does not deduct the number of workers
  • Increase the exposure of the schemes issued by the government in the rural areas like Mahatma Gandhi National Rural Employment Guarantee Act”,( MGNREGA) (job scheme). Along with this, it must consider an urban employment guarantee.


Kritika Agarwal

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