Over 136 million jobs are at risk due to Corona lockdown — Here are the worst-hit sectors
- The outbreak of
Coronavirushas disrupted the job market as the nation goes into a complete lockdown for 21 days.
- As many as 20 million jobs might be lost if the tourism industry doesn’t rebound by October, says the Confederation of Indian Industry (CII).
- From food products to electronics to cement and ceramics, nearly nine million jobs may be affected within the manufacturing space.
According to the estimates by the National Sample Survey (NSS) and Periodic Labour Force Surveys (PLFS), nearly 136 million jobs are on the line. Going by the unemployment rate before Coronavirus hit the economy, India needs to add nearly 10 million jobs to keep the working age population employed.
“The implications of this crisis will be dire. We will inevitably have less fiscal space to make much-needed investments in, for example, education, skills, preventative healthcare, and infrastructure. This will not just prevent us from moving forward but will set us back. Our large and growing youth population will be further disenfranchised, potentially spurring social discord, crime, and instability," Sabina Dewan, the president and executive director of the think-tank JustJobs Network told Mint.
This will majorly impact the gig economy, contract workers, small businesses — and also those employed without a legal contract such as casual labourers — who do not have a fixed take home salary. Over five million Indians have contract jobs which are less than a year in tenure.
A recent survey by the job search platform Indeed also said that half of the Indian businesses already trimmed the contractual workforce and freelancers to cut operational costs. In fact, a third of the companies say they will temporarily halt hiring activities.
‘20 million jobs might be lost if the industry doesn’t rebound by October’
Tourism and hospitality are one of the
As many as 20 million jobs might be lost if the industry doesn’t rebound by October, says the Confederation of Indian Industry (CII). That accounts for over half of the tourism and hospitality workforce.
In fact, restaurants already reported a 35% drop, because of fewer footfalls as people stay at home, practising social distancing. This has impacted flexi workers such as guides, restaurant sanitation workers, waiters, suppliers of vegetables and other raw material to the hotels.
Over 9 million jobs impacted in the manufacturing cluster
From food products to electronics to cement and ceramics, nearly nine million jobs may be affected within the manufacturing space, owing to the plant shutdowns, according to the temporary staffing firm Adecco Group. The lockdown has brought manufacturing and production projects to a standstill.
For instance, the handset manufacturing industry is deep in losses at ₹15,000 crore because of production delays. “At present, we have a turnover of ₹500 crore to ₹700 crore per day. So, a shutdown for about three weeks essentially means a loss ranging between ₹10,000 crore and ₹15,000 crore,” Pankaj Mohindroo, chairman of the Indian Cellular & Electronic Association of India (ICEA) told ET. ICEA represents smartphone manufacturers including Apple, Oppo, Lava and more.
As per a report by the Wall Street Journal, Apple seems to be going slow on its production of iPhone 11 in India.
Automobile sector can lose up to a million jobs
Meanwhile, the automobile industry, which has already been through massive production costs and falling sales for the last year, will also suffer more, thanks to the lockdown. This will cost the country a million jobs across dealerships, frontline workers among others.
The auto industry is staring at losses of over ₹13,000 crore due to forced shutdowns. That will also impact the economy as a whole since the industry also contributes around 7.5% to India's overall GDP.
600,000 contractual jobs at risk in the aviation sector
Airlines is probably the worst affected sector as both domestic and international travel has come to a standstill. As per recent estimates, nearly 600,000 contractual workers are at risk of losing their jobs, especially those in on-ground and support roles.
“Indigo, India’s largest airline, has reported a 15-20% decline in daily bookings over the past few days, compared with the week-ago period, and expects its quarterly earnings to be materially impacted,” Kapil Kaul, chief executive for aviation consultancy CAPA India told ET.
IndiGo, GoAir and Spicejet have already cut the employee salaries across roles for the month of March — including the chairman.
Over half of the revenue of the Indian apparel industry comes from exports — which has come to a halt
The pandemic has hit the global supply chain and trade has come to a grinding halt. Over half of the revenue of the Indian apparel industry comes from exports. More than a third of the apparel industry export orders are placed from Europe. According to the Ministry of Commerce, India exported garments worth ₹1 trillion in 2018-19.
Added to that is the shutting down of malls and retail stores due to lockdown. “With the region being declared the new epicentre for the disease by the World Health Organization, new orders are bound to be affected. But it is hard to assess the outcome now. We’ll know in the next couple of weeks,” says Raja Shanmugam, who is a manufacturer and heads the Tirupur Exporters’ Association.
However, the Confederation of Indian Textile Industry ( CITI) has asked the government for a relief package for the workers in the industry.
"Include cotton yarn and fabrics under Rebate of State and Central Taxes and Levies (RoSCTL), Interest Equalisation Scheme (IES) and Merchandise Exports from India Scheme (MEIS) benefits with immediate effect to prevent job losses for lakhs of people in the handloom, powerloom and spinning sectors," said T Rajkumar, chairman, CITI.
On the other hand, telecom, healthcare are the sectors least affected by the global pandemic.
The telecom sector seems to be rebounding as most of India is working from home during the lockdown, thereby availing more data services. With more people practising social distancing, the data usage is expected to surge by up to 15% in India, Quint reported citing Rajiv Sharma, head of equity research and telecom analyst at SBICAP Securities.
While healthcare is at the forefront of battling the Coronavirus infections. The public health emergency has led to the country prioritising in-house manufacturing of pharmaceutical ingredients after Coronavirus disrupted the global supply chains — leading to shortage of medical drugs, face masks, ventilators and more. India said it will spend $1.3 billion for pharmaceuticals.
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