India is the second-most populous country in the world. A mass of around 137 crores (approximate) is mainly divided into urban and rural, making way for different organised and unorganised sectors of work. Due to illiteracy and inadequacy of resources, the number of people working in unorganised sectors is enormous.
COVID- 19 has impacted the world in hazardous ways. Right from natural calamities to economic depression, every corner of the world is in distress. India, alongside COVID-19, is also struggling with earthquakes and looking for ways to get rid of locusts. These problems start to look petty when we turn our heads towards unemployment
CMIE ( Centre for Monitoring Indian Economy) had claimed in one of its reports released in the month of May that the unemployment rate had gone up to 27.11 % amid the lockdown from under 7% before the shutting down, which also marked the highest level on record. According to its weekly reports in the month of May, the rate of unemployment had risen dramatically in both urban and rural setups of the country. At the end of April, Puducherry had the highest percentage of unemployment at 75%, followed by neighbouring Tamil Nadu 49.8%, Jharkhand 47.1% and Bihar 46.6%.
Urban and rural employment have deescalated equally. The unemployment rate in rural India increased to 25.09% in the second last weekend of May while urban unemployment improved by 4%. The rates hovered between 24 to 30 % until May end. Also, around 122 million jobs were lost as lockdown began and started proceeding.
Economists have declared that rural unemployment will be escalating soon, right now around 1 out of every four people living in rural areas are unemployed. And it will be a tear-jerker to come back on track after everything ends.
Talking about country wise impacts, In the US, more than 6.6 million people filed jobless claims during the last weekend. Shut businesses and cratering stock prices have already piled a burden on the government while it is working out ways to stop the death toll from rising every day. In Japan, about 1.76 million people have been unemployed. Several other countries are also facing the same kind of problems.
Very few would understand the figures of how the rate of unemployment has escalated in the past few months, but the trend is not so confusing. There is an array of causes of the situation that the economy has landed into as far as unemployment is concerned. However, the most significant havoc is about how the problems are being politicised, and very few are eager to act on it.
Let’s look at the root causes of unemployment which has been quite a substantially staggering problem in our economy for a long, long time now:-
Population density- India is the second-most populous country in the world. Its density is so high that either any sector is over-employed or underemployed, simply due to lack of organisation.
Slow economic growth- Due to the lack of manufacturing capacity and exports, Indian economy fails to provide ample job opportunities.
Agriculture- Seasonal nature, either leads to people getting over employed or underemployed—lack of incentives and support via the government, which is a significant reason.
Unequal demand and supply- The market forces are never able to decide how much workforce they actually require for a task. It leads people to either go for jobs below their capability because of which they quit or wait for opportunities, which ultimately keeps them unemployed.
Lack of proper education and training- People aren’t given appropriate education and appropriate training for any job which keeps them unskilled, and ultimately they end up being unemployed.
Another cause and also a consequence of unemployment is MIGRATION. The past few months have been a ruckus for the government as the migrants started to move back to their native places after the lockdown was imposed, and they neither had jobs nor money to eat anything. Many of them covered the distance walking on roads, and many even died doing that.
The process of firing many employees at a time was no more alien in the past few days. For example, we saw Uber firing 3000 customer care employees on a video call. Many companies have already gone totally digital and started firing a lot of their workforce.
The government has been aiming to provide all sorts of help to the unprivileged and those facing a shortage of resources, with the help of relief stimulus. (DBT) Direct Benefit Transfer was increased, and a relief package of Rupees 20 lakh crores was given out by the government to extend help to those who are out of business during these testing times.
The government is planning to increase FDI to generate more and more job opportunities and also gearing to become self- reliant and self- sufficient. Both of these plans will definitely create more employment.
Now, the only thing that should be focused upon is to curb unemployment rigorously, emphasize on skill-building, and most importantly control the population. The government should pull up its socks because this will be an essential factor in any upcoming political processes, and most importantly, it is the need of the hour.