Unemployment in India 2020- Impact on unemployment rate due to the corona virus (COVID-19)

 

The impact of covid-19 on economy was imminent; lockdown has smashed the Indian economy. Unemployment was a great query for India and which is been discussed over years. On May the unemployment rate in India went more than 27%. The new data shows that India's unemployment figures are four times that of the US for the month of May. 122 million Indians lose their jobs in April alone. Centre for Monitoring Indian Economy(CMIE) said that around 27 million youth in the age group of 20-30 years lost their jobs in April 2020 following a nationwide lockdown to prevent the spread of Covid-19. This also caused a GVA (Gross Value Added) loss of more than 9% for the Indian economy for that month. CMIE also states that the peak of 27.1% of unemployment has fallen to 24% at the week end of May. CMIE’s survey shows that youngsters in the age group 20-24 years accounted for 11% of those who lost jobs while they constituted 8.5% to the total employed persons in the country in 2019-20. CMIE reports also mentions that 34.2 million of these young men and women were working in 2019-20 and in April 2020 the number has fallen to 20.9 million.

Unemployment rate in 2020

CMIE says that job loss of 27 million youngsters in India in their 20s will have serious long-term repercussions. They will have to fight hard with new labours making them difficult to build the savings it will require later in life. Adding to this CMIE also says that during April around 33million men and women lost their jobs in their 30s out of which 86% of them were men. Unemployment in India in march was 8.7% which showed a  vertical spike in April and rose up to 23.5%. This is attributed to the lockdown, which brought most economic activity - except essential services such as hospitals, pharmacies and food supplies - to a standstill. After may since the unlock process has begin India witnessed a down trend in the unemployment rate. From the high peak of 27.1% in May, In June unemployment rate went down to 10.99% and in July it fallen to 7.43%. Unemployment rate in July dropped to pre covid-19 levels indicating that the job crisis during past three months, when the country was under strict lockdown, has declined notably. As per the data analysis, the urban unemployment rate remained higher than both national and rural joblessness rate. The unemployment rate of Odisha and Gujarat stood at 1.9% each, lowest among the states, followed by Meghalaya at 2.1%. Haryana on the other hand had highest unemployment rate at 24.5%, followed by Delhi at 20.3% and Himachal Pradesh at 18.7%. Government has launched various programs and campaigns to help sustain these households. Under the Pradhan Mantri Garib Kalyan Yojana, 312 billion Indian rupees were accrued and provided to around 331 million beneficiaries that included women, construction workers, farmers, and senior citizens and to mainly support small business through the crisis.

UNEMPLOYMENT IN INDIA FOR 20 Years

Unemployment in India for past 20 years

India is a nation with massive unemployment problems faced. Unemployment can work as a state of inactivity for a man fit and ready to be defined. According to International Labour Organization (ILO) the unemployment is rising in India. Until the corona hit, the unemployment rate in India was between 5-6% and the number keeps on fluctuating between this range, the trend doesn’t showed any steep downfall in any year. Indian economy is considered to be one of the fastest growing economies of the world and India is member of BRIC. Considered India’s growth with other BRIC countries the growth is was rather minimal. India is a country where its most population depends on daily wages, the corona impact was huge on these people the lockdown had locked their income and they lost their job and salary, they had no way to get a day roti for their family. The CMIE calculates its overall unemployment rate by conducting a survey that includes more than 174,000 households over a four-month period. Bihar,  Andhra Pradesh, Rajasthan, Telangana and Delhi all of which have recorded rates markedly higher than the national average. Indian youth is fighting the most with unemployment, the rate of unemployment among Indian youth is growing every year which is very large comparing to Nation average.

Youth Unemployment in India

Youth Unemployment in India over past 20 years

Youth of a country is considered to be the backbone of that country and the youth decide the growth of that nation. But the youth unemployment in India is very high, higher than 20% which is far higher than nation’s average. Youth unemployment rate points to those in the workforce who are aged 15 to 24 years and without a job. Lack of proper graduate job is the main reason behind youth unemployment in India. There are more than 6 crores graduated unemployed youth in India.

Reason for Youth Unemployment in India

In India lack of graduate jobs is the main reason for youth unemployment, millions of graduates are graduating every year but the graduate jobs is only a chip of what it need to be. In India engineering students working as delivery boy, shopkeepers etc are the reason of lack of graduate jobs. Also lack of qualified or specialized job is also a major reason; an engineer graduate passes from non-IT field finds difficult to enter a non-IT filed in India which ends up in unemployment or shift of job. Government of India should take measures to create adequate graduate jobs.

Real wage unemployment is also a major cause, there are still millions of graduates in India working for salaries below 10k per month. Engineering students in India working for 8k or below are many which eventually force them to quit job leading to unemployment. Indian government should pass rules to set a minimal wages for graduate jobs.

Lack of proper knowledge or skill is also a reason, this is not only the mistake of the youth. It’s the education system which made us graduate but without job skills hope NEP2020 rectifies that error. This lack of technical knowledge made the youth to quit job also made it difficult to get a job.

Seasonal unemployment and geographical unemployment are also the reasons, it refers to the youth working in the sectors like agro and where the geographical changes may affect their job. Calamities and other issues will also make them unemployed for a particular period. During COVID-19 lockdown this was crystal clear.

India have a new custom that all graduates or master graduates or PHD holders in depended that you had professional degree or not you should get a government job. An engineer or a doctor or Phd holder working as a clerk or a typist or watchman in any government sector is considered to be more valuable than working in a private sector which has their graduate jobs. In India to get married government job has become a mandatory criteria, this thoughts among the people made the Indian youth to run behind hard to get government jobs which indirectly makes majority of the youth to unemployed.

Solve unemployment problem in India

Indian government should focus on increasing the graduate jobs in both public and private sectors and also should encourage the investment of foreign countries thus creating more job opportunities. In country like India where agriculture is the main revenue, government should take measures to save the agriculture industry and create more job opportunities in those industries. The meaning of education should be changed and focus to be on technical knowledge and the youth should be able to get a job out of the education they acquire. A country with huge population government itself can’t provide job to all Indian’s, government should aim to increase the start-ups in India which can provide jobs to millions. Solution to unemployment in India is a huge topic and it should be discussed in dept.