March , 2021
Uncertainty over the return of job opportunities
13:31 pm

Kishore Kumar Biswas


The Indian government has been claiming that the economy is on a path of a ‘V’ shaped recovery. The Economic Survey 2021, prepared by the Ministry of Finance, has also claimed the same. Several indicators like collection of GST, number of issues of e-way bills, movement of GDP towards the pre-Covid levels and earning of profits of many corporate entities are projected to be testimonies of this claim. But many economists read these indicators in different ways and consider that full recovery of the economy may need time.


Unemployment in the economy


Availability of employment opportunities in an economy is a very important indicator for the well-being of the people. Mahatma Gandhi among other prominent personalities supported this view. Employment generation has been a priority of the Gandhian philosophy of economic development. This is true for the left political parties as well. This concept gained global prominence after the Second World War and even today, when an economy slips into crisis, generating employment is a time-tested ruse for pushing it back into growth territory.   




There are several definitions of unemployment. The International Labour Organisation (ILO) defines an unemployed person as a person who is without a job during a given week, available to start a job within the next two weeks and actively having sought employment at some time during the last four weeks or having already found a job that starts within the next three months.


 Unemployment during the pandemic


A complete lockdown was declared in India on March 25, 2020. Data from the Centre for Monitoring Indian Economy (CMIE) show that the unemployment rate in the Indian economy shot up to 23.52% as compared to that in April 2019. Urban sector unemployment rose to 24.95% whereas it was 22.89% for rural areas. The overall unemployment was 21.73% in May 2020. It reached to 27.1% on May 3 - highest in the pandemic period. But then the rate of unemployment began to fall and it came down to 10.8% in June 2020. It fell down to 7.40% in July but again increased to 8.35% in August. In December, the unemployment rate rose to 9.06%. The most notable matter is the fact that in December, the rate of growth of rural unemployment exceeded that of the urban sector for the first time in the pandemic period. The rate of rural unemployment for that month was 9.15%.


Joblessness has been a long-term problem


Jobless growth has been a long-term problem for the Indian economy. When the government gloriously projected India as the fastest growing economy in the world in 2016-17, then also the unemployment rate was hovering around 6%. India’s unemployment rate was 6.8% in 2001 and rose to 9.6% in 2011. It is known that during that period, India’s growth of GDP began to rise. During the Manmohan Singh government, the growth rate was historically high - more than 8% on an average. India also attained a double-digit growth of GDP in that period. This data indicates that jobless growth has not only been a matter that has been triggered by the Covid-19 pandemic in India; it has been a long-term feature of the Indian economy. The pandemic has only intensified it.


A survey on government jobs


The growth rate of GDP had been falling for consecutive six quarters before the pandemic hit Indian shores. But even before that, the Indian economy had already experienced a decline in salaried jobs. In India, salaried jobs in the formal sector are considered as the most secured for livelihood.


Unemployment in the country has been a problem since 2017-18. A government job survey was made. However, it got delayed due to the 2019 Lok Sabha elections. The survey showed how the country’s unemployment reached more than the four-decade high level of 6.1% in 2017-18. Another important observation of the survey was that unemployment was higher in urban areas as compared to rural areas.


Way forward


The target should be to develop and focus on labour-intensive sectors of the economy like micro and small sectors, agriculture and rural and urban infrastructure. Almost every economist has been suggesting this model. It would be detrimental for the economy if economic planners only look to maximise profits for some selected organised units. The unorganised sector has been in deep crisis. Unless income of the common people is increased, economic growth cannot be sustained. The government has to enable income generation of the masses to sustain growth and development.  



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