By Shivanand Pandit
The world has shattered and splintered post COVID-19. The deadly contagion caused by coronavirus has created devastation all around the universe. According to the International Labor Organization (ILO) universally over 2.5 crore jobs would be vulnerable due to the spread of deadly virus. The ILO has described COVID-19 as the worst global crisis since World War II which may lead to economic crisis nastier than the Great Depression of 1930s. Major chunk of the world’s informal workers are from developing nations and they are expected to be severely affected.
India will be no exception to the job losses. Due to decline in demand as well as the disruption of workforce for corporate entities the unemployment rate went up to 24 per cent in May 2020. This also caused a Gross Value Added loss of more than nine per cent for the Indian economy during the month.
Of late, five big organizations in the consumer space in India, Uber Ola, Zomato, Swiggy and Cure.fit have decided to reduce jobs and altogether cut 4,440 jobs because of shrinkage in business due to the epidemic led lockdown. Uber said it will lay off roughly 600 full time employees in the India- South Asia region. Ola whose revenue is fallen by 95 per cent due to the lockdown, announced that it will be letting go 1,400
Swiggy and Zomato have also decided to condense their employee base. Around 540 employees of Zomato have been asked to look for new job opportunities while, Swiggy has announced letting go around 1,100 employees. Likewise, health and fitness startup Cure.fit had also terminated around 800 people. In addition, these entities have also declared salary cuts.
Some of the sectors are likely to bounce back fast. There will be an affirmative trend in food and beverage segment and employment in this sector could remain encouraging. Although exports of apparel and footwear will be low, positive domestic demand will maintain employment in this sector. In the power sector too due to tightening of credit and launching of new power generating and transmission stations employment is likely to see an upward tendency.
Similarly the pharmaceutical sector is also expected to see increase in employment opportunities. In the tourism sector, although international tourism will be slow, increase in domestic tourism will fetch employment opportunities. This trend will help the hotels and restaurants too. The employment outlook is positive in the chemicals and petrochemical sector as well as the telecom sector.
On the other hand, sectors that will be damaged deeply by the COVID-19 catastrophe include the retail, aviation, education, real estate and the metal and mining sector.
Before the present government came to power the Prime Minister Narendra Modi promised to create one crore jobs to erase youth unemployment in India. However, the data of official labor bureau has different story to tell.
Nevertheless the Garib Kalyan Rojgar Abhiyaan has been launched recently, proper examination discloses that there is nothing new in the pattern and 25 prevailing schemes bundled together which are already functional. On the whole, the scheme does not offer any elucidation to the massive problem of unemployment in urban and rural India.
As a final point, the government has to put basics in place. One of these is having a power packed national employment policy. The policy is a requirement for all the ILO member countries and should design the avenue to create job opportunities. Thus policy and politics will have to play an imperative role lighten the pain. Dirty political games hamper the economic revival. Good politics can guarantee that the anguish of the masses is curtailed. Welfare schemes should not be used as tactic to give advantage to the ruling party in the forthcoming polls. Otherwise, demographic dividend may turn into demographic burden.
The writer is a tax specialist, financial adviser, guest faculty and public speaker based in Goa. He can be reached at email@example.com