Job opportunities in India were steadily rising in the first three months of 2021. Now the prospects looking bleak even in 2022.
- Employment rate continued to stagnate in April and saw a marginal fall for men and substantial fall for women.
- One of the biggest worries that emerged during the second wave is a rise in urban unemployment, inching closer to 10%.
- Unemployment rate for the week of May 16 shot up to 14.45% on all-India basis, the highest since the week of June 7, 2020, when the all-India unemployment rate was 17.51%.
- With the second Covid-19 wave stalling economic recovery, “new investments that could create jobs in large numbers” are unlikely during 2021-22.
According to a Michael Page report, the second wave of the pandemic hit India with vengeance when the country’s economy was trying to regain its footing in the beginning of 2021. The number of job opportunities rose 32% during the first three months of the year as compared to December quarter in 2020. This indicated movement towards an economic revival. However, the daily Covid-19 case count went up from 81,000 on April 1 to more than 400,000 on April 30. As the outbreak grew worse, state governments applied restrictive lockdown measures that halted the nascent economic recovery in its track.You will find more infographics at Statista
Since April 2021, India has been witnessing a decline in the economic activity owing to localized lockdowns of varying severity which led to reduced mobility and employment opportunities. The month saw the unemployment rate touch 8%, rising 1.5% from March.
It is anticipated that more jobs will be hit and more economic distress will follow.
Continued market stagnation
As per CMIE, the latest data indicates that employment rate continued to stagnate in April and saw a marginal fall for men and substantial fall for women. This was the month when many states started pocketed lockdowns. As more and more states announce lockdowns, it is likely that the employment rate will further fall alongside earnings. Even for those who remain employed, earnings will feel the pinch as more and more workers crowd into fallback employment options. The impact of the second wave is likely to be more serious because people have not yet recovered from the first wave’s impact.
One of the biggest worries that emerged during the second wave is a rise in urban unemployment, which has inched closer to 10%.
The Covid-19 outbreak appears to be leaving a permanent scar on the job market. It has intensely impacted blue-collar jobs, gig economy or temporary workers more than any other class. The worst hit industries have been retail, hospitality, aviation and construction industry.
From recent observations, the current situation in India has affected many people and their families leading to disruption in their daily lives. Therefore, a hunch in confidence levels among aspirants to change jobs has been observed, thus impacting the hiring market adversely.
Economists believe continued lockdowns in cities will further put pressure on the job market as they restrict economy. They also agree that the increase in unemployment can be caused not just by lockdowns but also by the overall economic development.
Unemployment rate for the week of May 16 shot up to 14.45% on all-India basis. According to CMEI data, the unemployment rate went up as high as 14.71% for urban areas, while for rural areas it was tad lower at 14.34%. This is the highest since the week of June 7 last year, when the all-India unemployment rate was 17.51%. In April 2021, around 3 million regular jobs were lost again and the trend is most likely to continue unabated if the second wave prolongs.
However, the curbs and lockdowns in 2021 are quite well spread. The labour and employment market has a direct correlation on how our overall economy functions. Till now, the second wave has hurt self-employed people as well as informal workers in urban areas. The labour market appears to be holding up better this year. The 0.1% point decline in the labour force participation rate is marginal compared to the 7.8% point slump seen last year. The job prospects are bleak for 2021-22. As per CMIE, “New investments that could create jobs in large numbers are unlikely to be made during the year.”
Some experts have noted that sectors like IT and healthcare will not be impacted and will continue to lead hiring this quarter. The second COVID-19 wave comes at a time when India’s economy has made resilient comeback. Firms and consumers have rapidly adjusted to the new normal. Currently, the IT sector is very optimistic and Tech cities like Bengaluru, Hyderabad continue to be the prime spots in IT-related hiring.
More and more conventional companies are making the shift to digital processes and implementation leading to a surge in demand for IT support. India also has a very strong position as a shared services centre for IT companies globally and this trend is likely to continue for a long time. It is observed that hiring activities in the healthcare sector have gone up by almost 35% and also a surge of 10-15% within diagnostics and MedTech specifically. A lot of positive development in India’s healthcare sector has been observed. There is investment coming from private equity and venture capital firms as well as pharmaceutical giants particularly in the diagnostics division.
The demand for technicians in the diagnostic labs for short-term contracts as well as nurses and paramedics are gaining ground. There is even more requirement for medical specialists in home ICU set-ups, essential deliveries for the one ones who are quarantined and medical associations. This has again created plenty of new jobs in India’s healthcare sector, with specialized skill sets different from what was customarily needed in this field.
However, observations by experts say the future of blue-collar work is likely to be dominated by gig economy jobs where the workers will have the flexibility to work across various sectors based on their availability and skills. This shift will allow the blue-collar workers an opportunity to maximize earnings.
Although, in the current situation things look bleak but a swift recovery is much anticipated. Experts say the country’s economy can stabilize if the vaccination drive is done at a war footing. It is expected that a significant part of the new jobs creation will possibly arise in Asia over the next decade.