Six crore Indians – 2.7 crore in their 20s and 3.3 crore in their 30s – lost their jobs in April, data released on Tuesday by the Centre for Monitoring Indian Economy showed.
This came after the economy was battered by a weeks-long lockdown to fight the coronavirus outbreak. The cases in the country have crossed 74,000 and Prime Minister Narendra Modi said the lockdown would be extended beyond May 17 with a new set of rules.
Meanwhile, the employment rate improved last week due to the pick-up in agricultural activity and the re-opening of businesses in rural India. The week that ended on May 10 recorded a jobless rate of 24% in comparison to a record high of 27% the previous week. “These improvements notwithstanding, this is not a good place to be in,” CMIE Managing Director and Chief Executive Officer Mahesh Vyas said.
The organisation said job losses among the vulnerable sections of the society is likely to raise the proportion of households in debt. “This has serious long-term repercussions,” Vyas said. “It is during this age that young India builds its career in the hope of a bright future. If the career of this cohort is disrupted or postponed by even a year it will have to compete with the new cohorts joining the labour force after them – arguably, for fewer jobs. Young India will not be able to build the savings it will require later in life.”
He also said the unemployment would impact household savings. “While households may well conserve cash during these times, the loss of jobs among the young deprives households of the extra cash that is mostly saved for either buying a house or durables or for retirement,” Vyas added. “This loss of savings will have long-term implications.”
The managing director also highlighted that overall 12 crore jobs had been lost because of the lockdown, adding that the window of the benefit of doubt in favour of a lockdown was closing. “Claims that the pandemic can be devastating is countered by the fact that the lockdown is already devastating,” he said, adding that the government’s “dithering” over a fiscal package meant that unlike in the United States where leaders provided assistance to the jobless, Indians could not afford to remain unemployed.
On Tuesday, Prime Minister Narendra Modi announced a Rs 20 lakh crore-financial package to support the economy. This package includes the government’s recent announcements to support some key sectors as well as recent measures rolled out by the Reserve Bank of India.