We need to distinguish between employment and the work done because many were employed but they were not doing anything so were not producing goods and services.ĭo you think this decline would further impact investment either domestic or from abroad because they were already cautious since the outbreak of the pandemic?Ĭonsumer demand for other than essential items has already declined. OLA or UBER drivers were employed but their taxis could not ply on the road. Most of the teachers in schools and employees in government offices were employed but working for half time or working on alternate days or so. Lot of factories were closed which means people were employed but not working. Even if people worked under MGNREGS, it was not their original work – it is only residual employment. My estimate is that it could be more than 200 million because a lot of people migrated and they were not counted in CMIE data. It said that in April 122 million jobs were lost. According to CMIE, 18.9 million jobs in the organised sector were lost. So, no other large country has faced the kind of problems India has faced like a more than 40 per cent decline in the first quarter GDP.Īlong with the poor, the middle class has also suffered because of loss of jobs in the organised sector. It is because of the large unorganised sector which is poor and that is not the case with other G20 countries, the pandemic has hit India the most. That is why, a lot of people migrated to the rural areas from urban areas. Incomes have declined all around and that is hitting the poor the most. There has been massive unemployment and still we have not been able to recover from it. What could be the likely impact of this free fall and what is the way forward? Special attention should have been paid to the unorganised sector during the lockdown which was not done. Unfortunately, that was not done and people are suffering a lot. If the lockdown was done with some preparation then the recovery could have been quick, like, in the case of China. In the pandemic the lockdown was necessary to control the spread of the disease. So my estimate was that the economy would be down by at least 40 per cent and not by 23.9 per cent. The unorganised sector remained largely shut due to restriction. In June, due to Unlock1, it might have recovered to 50 per cent. My estimate was that in April the economy declined by 75 per cent and when the lockdown was eased in May, it may have declined by 60 per cent. It should have been much more because the unorganised sector which is 45 per cent of GDP and where 94 per cent of the workforce is employed was immediately hit in April. I am surprised that the decline in GDP in Q1 is given as 23.9 per cent. What’s your take on the free fall of the GDP? Is it because of the pandemic or something else?

Nuashad Khan Arun Kumar, Economist and author Share on WhatsApp Share on Facebook Share on Twitter Share on Telegram Share on Reddit Share on Email

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