Indian Job Market: Worst yet to come

Conjectures about the Coronavirus(COVID19) are various and widely differed. Whereas the genuine misfortunes due to the pandemic are yet to be discovered, its influence on our vocation and livelihood is unavoidable. 

The Centre for Monitoring Indian Economy (CMIE) put forth the unemployment rate at the end of the week on 26th April 2020 to be 21.1% which was 7.16% at the end of the first month of this year and yet the worst is unseen.

Markets have tremored since economic slowdown has reached a peak amid the shutdown all over the country. The 21 days lockdown declared on 24th May have not only increased in duration but also have given all industries a ghastly pain about their economy post this period. 

According to the Confederation of Indian Industry (CII) Snap Poll, 2020 there could be a sharp decrease of 10 per cent in revenue and more than 5% decrease in profits in the majority of firms. The coronavirus outbreak and unavailability of its cure forced the shutdown of many major industries, resulting in huge job losses across the country.

Out of 200 CEOs who took part in the Snap Poll, 52% anticipate job losses in their respective sectors post lockdown. 47% of the firms expect up to 15% job losses, and another 32% expected 15 to 30% job losses

During the nationwide shutdown, the companies were forced to cut salaries, lay off or send their employees on leave without pay for an uncertain period of time. Where the incumbents are still trying to protect their employee’s cashflow and mitigate any overwhelming financial burden, the startup sector has taken the biggest hit. The so-called unicorn startups like Udaan and Oyo have laid off thousands of employees leaving their future in the dark.

R. Chandrashekhar, former president of NASSCOM and former Secretary to the Indian Department of Information Technology, said: “The industry has been scrambling to set up its own business continuity plan”. 

The CMIE even expects the jobless rates inflate more than 23% following quarantine. 

As the recruitment process has also been halted, a majority of applicants are still optimistic about getting their dream jobs. However, after the pandemic situation companies are expected to be quite reluctant to welcome new labour force. They have to end up taking strict decisions to either withdraw the offers or hire the newcomers with lower compensation.

Another perspective of this scenario is also drawn by the companies that they expect a huge competition over jobs. The ex-workers would add to the number of job-seekers which could result in havoc in the industry and economy. In 2019 the unemployment number was a 45 year high at 6.1% and if predictions were to be believed this year could see the worse rate of job scarcity ever. Furthermore, the job scarcity would even force the seekers to negotiate with lesser pay and formidable conditions.

The shutdown hasn’t only affected the production, manufacturing or IT industries. The travel and tourism sector also has been in a deplorable state where 70 per cent of the working force may become unemployed. 

The pandemic is expected to impact more than 29 lakh jobs in the Indian aviation and dependent industries, according to IATA, the trade association of the world’s airlines. 

The Federation of Associations in Indian Tourism and Hospitality (FAITH) in a letter to Prime Minister Narendra Modi has requested for a year of EMI holiday of standard and premium instalments on credits and working capital from financial institutions (both banking and non-banking). Even Hotel Association of India’s (HAI) Vice President K.B. Kachru showed deep concern that lack of expeditious steps could result in more than 3.5 crore job losses. And as work from home strategy doesn’t fit with the hospitality sector, an incurable loss of around 5 lakh crores may occur in the current financial year. 

Till a miracle is not materialized, this storyline doesn’t permit the tourism and hospitality sector to open up for new business anytime soon. 

Furthermore, the job crisis could see the worst succeeding as the export from countries like China may see a sharp fall. Chinese products have always dominated the electronic market in India; their unavailability would not only influence the consumer but the seller, the exporter and even employees who work in the delivery and post-sales services. 

Though we are nearing the end of the shutdown, reports suggest that it might get extended further. If the reports were to be believed, the government might have to reconsider the shutdown and even ease of the condition to save the economy from falling down into turmoil. But having said this the rising cases of infected people would be the matter to be more concern about. 

The Indian economy was considered by the expert to be less affected by the pandemic due to its less dependency on exports. However, as the most famous fictional detective Sherlock Holmes said: “There is nothing more deceptive than an obvious fact.” The absolute truth this time implies to be that though accepted or not, COVID-19 could not only cause a global recession but also affect the Indian market drastically.

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