It seems that a tragedy is happening. There is a steady increase in covid infections and a shortage of vaccines. Governments have started locking locally at various places and large-scale lockdown is being heard. A part of the workers have again become concerned about their livelihood. Although vaccines have also been made, but unorganized sector workers are the most sensitive to employment as a year ago. Even if there is a difference, it is that the fear of the people about the virus has reduced and people are not taking precautions like before. But in the meantime, the fear of losing livelihood remains the same as before. If the decision of a year earlier to impose a sudden lockdown was wrong, then it is a problem these days due to lack of vaccines, deprivation and lack of security framework for workers.
The first victims of uncertainty regarding lockdowns are migrant workers, daily wage laborers and small businessmen working in the unorganized sector. Their number may be more than 12 crores and they can be 30 percent of the total employed population. This time it cannot be assumed that the risk of loss of livelihood is same for everyone. Statistics for the first two weeks of April 2021 show that the unemployment rate has risen faster than 8 percent and the labor participation rate has come down to 40 percent.
In March 2021, around 39.8 crore people were employed, which is 54 lakh less than 40.35 crore in 2019-20. This figure is misleading. Much damage has been hidden in it. Urban and rural understanding of the loss suggests that the worst is yet to come. We are trying to assess the impact of COVID-19 on employment a year after the virus attack by comparing the employment of March 2021 to 2019-20.
People lost their jobs and it became difficult to get employment in 2020-21. Workers who had lost employment moved from one profession to another. A large number of people were engaged in farming as they were unsuccessful in all other occupations. This is the reason that in March 2021, 9 million more people were involved in farming than in 2019-20. Agricultural production was said to increase by 2 to 3 per cent in almost every quarter of 2020-21. There was a sharp decline in labor productivity with 8 per cent increase in labor. We believe that such a large number of workers are associated with unemployment in agriculture. This hides the fact that the employment challenge in March 2021 is much bigger than the loss of 54 lakh jobs.
The salaried class suffered the most in terms of employment in 2020-21. As of March 2021, there were 7.62 crore salaried employees. This was 98 lakhs less than the figure of 8.59 crores in 2019-20.
Most salaried people work in urban areas. Urban India accounted for 58 per cent of the salaries in 2019-20. But they accounted for only 38 per cent of the lost 98 lakh jobs. More than 6 million salaried people lost employment in rural India. Most of these would have been engaged in farming. About 3 million businessmen became unemployed in rural India. The number of cultivators in the villages increased by 90 lakhs. That is, people who lost their jobs and businesses in rural areas have become engaged in agricultural work. That is, the increase in agricultural employment in March 2021 was due to those who had lost their non-agricultural work. It cannot be called a migration from cities to villages.
The possibility of lockdown or lockdown in urban areas can give a boost to migration from cities to villages. The congestion on railway platforms in Maharashtra and the announcement of special trains to North India indicate that people have once again feared loss of livelihood. According to reports, people from Maharashtra, Gujarat and Delhi are moving towards Uttar Pradesh, Bihar and other northern states.
Its initial impact was on the retail and restaurant businesses in Delhi and Mumbai and now it is also affecting the logistics portion of the supply chain. Sadly, there are reports of harassment with partial lockdown. The fear is not only of livelihood but also of losing freedom.
Most of the employment lost by salaried people in March 2021 was in rural areas but 37 lakh people lost jobs during this period as compared to the level of 2020-21.
If the lockdown is implemented then it will affect the employment in urban areas also in the coming time. The start of the lockdown again and the continued decline in paid employment has once again worried people. The decrease in paid employment also indicates that the chances of getting new jobs have been reduced.
This time the government seems to be avoiding the strict lockdown as before. Perhaps he has taken some lessons. In such a situation, it would be reasonable to assume that these lockdowns would not be more harmful. But they will definitely disrupt the process of reform which is already incomplete. Labor participation was 40.2 per cent in March 2021 while it was 42.7 per cent in 2019-20. At the same time, the employment rate fell from 39.4 percent to 37.6 percent. At the same time, the unemployment rate is still at a high of 6.5 percent although it was much higher with 7.6 percent in 2019-29.