Over 1.8 Crore Salaried Jobs lost Since April, Nearly 50 lakh In July

New Delhi : More than 1.8 crore salaried employees lost their jobs after the pandemic forced businesses and firms to shutdown in India since April. Of them, nearly 50 lakh jobs were lost in the month of July.

Nearly 50 lakh salaried jobs were lost in India in July, according to latest data released by the Centre for Monitoring Indian Economy (CMIE). The development comes at a time when economists predict India’s financial woes to continue throughout the year.

According to CMIE’s latest report, more than 1.8 crore salaried employees lost their jobs after the pandemic forced businesses and firms to shutdown in India since April. The report casts serious doubts over the prospect of healthy economic recovery as job losses in the formal sector keeps ballooning.

It may be noted that 21 per cent of all employment in India is in the form of salaried employment, far lower than the number of those engaged in the informal sector.

While employment in informal sector and rural areas have seen an uptick since April, the lack of improvement in salaried jobs paints a worrisome picture in terms of growth.

Salaried jobs contribute more to the country’s GDP than employment in the informal sector, which is largely dependent on the formal economy. The bloodbath in salaried employment began in April when 17.7 million jobs were lost, following which 3.9 million additional jobs were gained in June.

However, five million jobs were again lost in July, and the plight of salaried employees has only worsened since the lockdown began, showed CMIE data.

Commenting on the CMIE report, Anusree Paul, Trade Economist and Associate Professor, School of Management, BML Munjal University, said, “Pandemic, and hence lockdown has significantly enhanced the rural-urban employment opportunity gap. Salaried jobs have impacted significantly, due to the loss of effective demand in the economy during lockdown.”

“During unlocking, job recovery pace is extremely slow. Rural and informal sector employment have shown signs of improvement due to government incentives announced last month,” she added.

Although rural employment numbers have gained momentum since the lockdown first began, its impact on growth will be less due to lack of demand in urban areas.

Many reports show that people in urban households have cut their monthly expenses and are spending less. And if demand continues to remain subdued in urban areas, the subsequent flow of cash to the informal and rural economy will be impacted severely.

The fresh job data released by CMIE further escalates doubts about India’s economic recovery as other key indicators like inflation, GDP, factory activity data and fiscal deficit continue to remain worrisome.

Experts said that India’s informal economy will be hardest hit if there is no improvement in salaried jobs. They also believe that it will lead to a substantial delay in economic recovery.