The Centre for Monitoring Indian Economy (CMIE), a prominent business information company, recently published data reflecting the job gains and losses during the Covid-19 lockdown period spanning April to July 2020. CMIE’s role as an independent think tank since its establishment in 1976 has been to compile economic and business databases, generate specialized analytical tools, examine data to spot trends in the economy, and subsequently provide this information to customers for research and decision-making purposes.
The Impact on Salaried Jobs
According to the data provided by the CMIE, salaried jobs suffered the most during the lockdown period with an estimated loss of 18.9 million jobs from April to July 2020. Specifically, 17.7 million salaried jobs were eradicated in April alone. After a brief rebound in June where 3.9 million jobs were regained, 5 million were lost once again in the next month.
Salaried jobs are often characterised by better employment terms and wages, a higher prevalence in urban areas, and greater resilience to economic shocks compared to other types of employment. While they are not easily lost, once gone, they become significantly difficult to recover. In India, only 21% of the total employment is in the form of salaried employment. The loss of urban salaried jobs not only threatens the immediate livelihood of middle-class households but also carries potential long term damaging effects on the economy. Several companies across different sectors have resorted to job cuts, salary reductions, and unpaid leave since the announcement of the lockdown.
Growth in Informal and Non-Salaried Jobs
In stark contrast to salaried jobs, informal and non-salaried employment showed signs of growth during the lockdown period, increasing from 317.6 million in 2019 to 325.6 million in July 2020, which is an increase of approximately 2.5%. This improvement is primarily attributed to the phased opening of the country.
Accounting for roughly 32% of total employment, this category took the biggest hit in April 2020, suffering 75% of the losses. Out of a total of 121.5 million jobs lost that month, 91.2 million belonged to this category. The hardest hit in this segment were small traders, hawkers, and daily wage labourers.
Shift Towards Agricultural Jobs
The data also indicates a shift towards agricultural employment due to substantial job losses in non-farm sectors. Over the four-month period, the farm sector added 14.9 million jobs. In 2019, nearly 42.39% of India’s workforce was employed in agriculture, further emphasizing the role of this sector as a fallback option in times of economic uncertainty.
