UPDATED: June 1, 2021 17:40 IST
The second wave of Covid-19 has severely impacted household incomes and jobs as local lockdowns remain imposed in most states. The impact of these local restrictions has been felt by people working in the informal sector, according to fresh data released by the Centre for Monitoring Indian Economy (CMIE).
Over 10 million Indians have lost their jobs because of the second wave of Covid-19, and around 97 per cent of households have faced income loss since the beginning of the pandemic last year, Centre for Monitoring Indian Economy (CMIE) chief executive Mahesh Vyas said.
The unemployment rate measured by the think-tank is expected to come at 12 per cent at the end of May as against 8 per cent in April, Vyas told news agency PTI, adding this signifies that about 10 million or 1 crore Indians have lost jobs in this period.
Stating that the main reason for the job losses is “mainly the second wave” of Covid-19 infections, Vyas said, “As the economy opens up, part of the problem will be solved but not entirely.”
He explained that people who lose jobs find it hard to get employment, specifying that while the informal sector jobs come back quickly, the formal sector and better quality job opportunities take up to a year to come back.
The unemployment rate had touched a record high of 23.5 per cent in May 2020 because of the national lockdown. Many experts opine that the second wave of infections has peaked and states will slowly start to ease the economic activity-impacting restrictions in a calibrated fashion.
Vyas further said an unemployment rate of 3-4 per cent should be considered as “normal” for the Indian economy, hinting that the unemployment number will have to decline for longer before the situation improves.
He said CMIE has completed a nationwide survey of 1.75 lakh households in April which throws up worrying trends on income generation during the last year — which has witnessed two waves of the pandemic.