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impact of covid

Covid-19 has severely impacted many countries across the globe, and India is no exception. This once-in-a-century crisis has deeply affected the roots of the employment sector. The impact of Covid-19 on the Indian economy is also visible in terms of Gross Value Added (GVA) loss of more than nine percent. The rise in the unemployment rate, job loss and hiring seize all create a scary image of the future of the Indian job market.

Negative Impact Of Covid-19 On Employment

It’s no surprise that there is a lot of negative impact of Covid-19 on employment. In April 2020, the unemployment rate climbed up to an all-time high of 23.52%, according to the Centre for Monitoring Indian Economy (CMIE) report. The unemployment rate stands at 7.42%, urban 9.08% and rural 6.68% on 15th August 2021. The difference is easily visible in numbers as well as in the job market.

Nearly 97% of households in India have witnessed a decline in their income since the outbreak of this pandemic. And the income of the households at the bottom of the income distribution is completely wiped out, increasing inequality dramatically. In the case of informal sector workers, there is a massive drop in income ranging from 40% to over 80% during the lockdown and the following months.

Women and young workers are more affected than men when it comes to unemployment. Only 7% of men have experienced a permanent job loss, whereas this number reaches up to a massive 47% for women. The women’s workforce participation rate (WPR) was fairly increased up to 90% of the pre-pandemic level by March 2021. But at lower earnings compared to men, resulting in a large gender wage gap.

For young workers, the job loss percent was 33 (15–24 years), while it was only 9% for 45+ and 6 % for 35–44 years old. The unemployment rate has increased from 40% during the pre-pandemic time to 54% by the end of 2020. The Covid-19 impact on employment relationship is far from recoverable in the next two years.

Overall Impact Of Covid-19 On Employment Sector

The overall impact of Covid 19 on the employment sector is huge. With such high volatility of the unemployment rate, non 100 percent functioning market, and the imminent effect of the third wave, the employment sector is far from reaching the pre-pandemic level.

While there is loss at one end, there is gain at another. The pandemic has given a steep rise towards the digital era in India. Every sector is turning towards modern technologies providing a bigger job market in Digital Marketing, Cloud Computing, Cyber Security, Data Science, AI and Machine Learning, etc.

Though, the problem is that India lacks job seekers that are highly skilled in these fields. This results in a huge gap between the intent of hiring and the actual hiring, keeping unemployment at a high rate. The gap has increased to 50 percent in tier 2–3 cities. In January-March, 2021 the index of actual hiring was pegged to 60, which was 132 in July-September, 2020.

What India needs right now is more campaigns like the Atmanirbhar Bharat Rozgar Yojana from the Government of India. And a rapid upgrade towards the digital era of all the sectors, especially for job seekers.

Written By ajays

January 16, 2022

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