Rahul Gandhi warns ‘Mass Unemployment’ in India: Stats are alarming

Ankit Kumar
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mass unemployment in india 2020

Is India really moving towards mass unemployment?


Congress leader Rahul Gandhi, in continuation of his explainer videos, released a video on the BJP government’s economic policies on Monday. In the video, he claimed that the BJP government has attacked the unorganized sector and wants to enslave people. He also talked about why India was not adversely impacted by the worldwide recession in 2008.

He emphasized the importance of the unorganized sector of India which includes farmers, vendors, laborers, small and medium industries. He said that India’s economy can’t be hit if the unorganized sector stays strong.

The Congress leader also alleged that the government has attacked the unorganized sector in last 6 years citing demonetization, wrong GST, and Coronavirus lockdown as reasons. He said that the aim of these decisions is to end the unorganized sector as the government wants to take the lakhs of crores rupees that are in the unorganized sector.

In the end, Rahul Gandhi warned that India could face mass unemployment in the upcoming 6 to 7 months as the unorganized sector accounts for almost 90 per cent of employment in the country.

Understanding the Job-losses in India

As per the Centre for Monitoring Indian Economy (CMIE), more than 1.8 crore salaried employees in India have lost their jobs since the coronavirus lockdown in March. 50 lakh of these job losses were reported in July only.

The report said that at the start of the lockdown, informal jobs were most affected which suffered 75 per cent of the hit in April. As we entered into Unlock and the economy started opening up, these jobs came back. Of the total 9.1 crores lost jobs, only 68 lakhs were yet to return till mid-August.

India was already facing employment challenges before the COVID-19, but the pandemic has amplified the situation. Job disruptions have taken place in the form of reduced working hours and earnings, difficulty in transitioning from college to work, disruptions in education and moving between jobs. India is also affected because almost half of the youth in India is or was employed in four sectors that are hardest hit due to the pandemic – manufacturing, wholesale and retail trade, accommodation and food services, and rental and business services.

Read more: Pandemic VS Academic Year: What should the priority be?

Youth population could be in trouble

Looking at the fact that India’s young working population is growing rapidly, unemployment could dent the expenditure of people  and will possibly lead to a rise in poverty levels. India’s current unemployment rate is 7.9 per cent.

Once lockdown is over (all restrictions), then the companies would evaluate the economic situations and find out if they can survive with the resources they have in the next few months and years. If they won’t be able to survive, it is expected that the number of salaried jobs will decline further, as companies will look to cut cost and reserve more cash.

The situation could worsen if India’s job situation doesn’t see improvement in the near future. It won’t just cast disaster on the individual earning and growth, but also for the collective economic progress of India.

The majority of the youth population won’t be able to save enough money for the future if the present situation continues. It can also have a spillover effect on the coming generation.

Several reports have indicated that the country needs to add at least 1 crore jobs every year to counter unemployment, but the job losses due to the COVID-19 makes the task even harder.

The biggest advantage of working population is now a disadvantage?

The situation has come to a point where it won’t be wrong to say that the biggest advantage of India- a large working population, is now damnation for India due to lack of job opportunities.

The current job crisis may create a bigger problem, that is young people will be forced to accept jobs with lower salaries and fewer benefits as they will be desperate for jobs.

This might lead to lower spending among young workers which could be a huge setback for growth as these people are more likely to purchase a larger share of properties, consumer durables goods and vehicles. The only possible way to find a solution seems is direct employment generation.

Experts believe that the government should work on large-scale and targeted responses like public employment programs, youth-centric wage subsidies, along with measures to accommodate the students whose education is disrupted due to the lockdown. Also, the government needs to expand the digitalization of work so that people can work from home without hindrances. Although some jobs require physical presence, but those who don’t can avail the service of telework if there is proper digital infrastructure in the country.

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