The country sees a surge in Omicron cases. With an ensuing third wave, a panic situation looms across the country. India recorded its first Omicron case on 2nd December, 2021. The two men tested positive in Karnataka, the numbers have been increasing thereon. Omicron is said to be highly transmissible but milder than the Delta variant. The Ministry of Home Affairs has asked the States to not let their guard down and consider imposing need-based local restrictions. Many states have already started imposing restrictions in the form of night curfews, crowd control measures, etc. to counter this threat. Just when the country was getting back on track, life was getting back to normal, and the economic recovery was gaining momentum, the omicron scare questions the impact on the Indian economy once again.

Since the country has started looking at state-wise restrictions, the direct impact will be on the mobility of labor across the country.  The labor force forms more than 40% of the country hence, unemployment will be on the rise. As the data from the Centre for Monitoring Indian Economy (CMIE) indicates a four-month high, India’s unemployment rate rose to 7.9% in December.


Most of the contact-intensive services like tourism, transport, and other entertainment-related services will be hit for longer periods. Due to the threat of contracting the virus among the people.  The restaurants are allowed to work only at 50% capacity. They are already facing losses due to fresh curbs. The tourism sector has experienced a major downside because tourism generates a major chunk of employment. Since it involves direct contact, it cannot be fully operational. The education sector also suffered a setback because nearly 100% of education shifted to the online mode. Thus, it was not practically accessible to all.

The pandemic has placed mankind in a very tough choice between life and livelihood. The GDP growth had crashed 23.9% in response to the Centre’s no notice lockdown. India’s GDP shrank 7.3% in 2020-21. This was the worst performance of the Indian economy in the past four decades. The first and the second lockdown has pushed the economy further back. Just now when it was recovering, there is a possibility of a third lockdown looking at the rising cases. However, the country must be better prepared to fight only if this variant is short-lived because of a large-scale immunity present in the country.

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