India's job market is on a road to recovery, with most of the sectors restoring many jobs that were lost due to coronavirus pandemic-led nationwide lockdown, raising hopes that the worst may be over. Mitigating the impact of lockdown, most of the sectors, including agriculture, services, real estate and construction, have seen some recovery in terms of employment, but jobs have moved from higher labour productivity sector to those with low productivity, says private think-tank CMIE.
"Jobs have moved from those sectors that have higher labour productivity such as manufacturing and also services to those with low productivity such as in agriculture and construction," says Mahesh Vyas, CEO of Centre for Monitoring Indian Economy (CMIE).
According to CMIE, job in the services sector, such as retail trade, travel and tourism, education and personal non-professional, that took massive hit during the lockdown, witnessed an uptick in employment during December quarter. While employment in the services sector still remains below pre-COVID levels, there is a slight improvement from before. As per the report, employment in services sector recovered partially to 146 million in the September 2020 quarter and then 148 million in the December quarter, after falling to 128 million in the quarter of June 2020. During June quarter, retail trade suffered the largest loss of jobs of 10 million followed by travel and tourism with a loss of 5.5 million jobs and education with a loss of 5.3 million jobs. Loss of jobs in the personal non-professional services stood at 2.5 million.
However, by December quarter most of these services sector job losses had recovered, except education. Travel and tourism sector, which saw its employment fall by 5.5 million during the severe lockdown of June quarter, employed 20.7 million people in December 2020 quarter, which was 1.3 million more than it did in 2019-20. Other services sectors also witnessed an improvement. As a result, while the services sector saw job losses of 25.5 million in the June 2020 quarter on a base of 154 million, it was down to 8.3 million in the September quarter and further to 5.5 million in the December quarter.
In contrast, employment in the education industry, which had risen from 13-14 million in 2016 and 2017 to 15 million in 2018 and 2019, started showing weakness towards the end of 2019. Employment fell to 14.5 million in the quarter of March 2020 before dropping precipitously to 9.7 million in the June 2020 and September 2020 quarters. In the December 2020 quarter employment in education was down to 9.1 million.
Agriculture, which accounts for about 36 per cent of total employment in India, was the only sector that did not suffer any job loss during lockdown, albeit it saw marginal rise than it was in the preceding quarter and also than the corresponding quarter a year ago. Employment in agriculture sector hovered between 140 million and 150 million since 2016 till the quarter ended June 2020, which was the first quarter of the lockdown and the one that experienced the most severe lockdown across the country. It shot up to a record 158 million during September quarter, which was a substantial 5.5 per cent higher than it was in the year-ago quarter. It declined marginally to 154 million in December quarter on the quarter-on-quarter basis, but it was still 3.5 per cent higher than its level in the year-ago quarter of December 2019.
"The increase in employment in agriculture during the lockdown indicates both, shift in labour from shrinking employment opportunities in non-farm sectors and also, favourable agricultural conditions during the year. This excess labour flow into agriculture shows in the record area sown under the kharif crops of 2020. Acreage under kharif crops increased by 4.8 per cent," said Vyas.
In contrast, job losses recovery in the manufacturing sector has been 'modest'. Manufacturing, which accounted for 40 million jobs in 2019-20, saw employment dropping to 24.6 million in June quarter of 2020, implying a loss of over 15 million jobs. It recovered to 27.1 million in September quarter and then to 28.8 million in the December quarter. "The shortfall is still quite high at 11.4 million. More importantly, every major manufacturing industry, except pharmaceuticals, employed less people in all three quarters of 2020-21 compared to the employment in 2019-20," CMIE said.
As per CMIE report, the real estate and construction industry has seen a near-complete recovery in terms of employment. The industry employed an estimated 61 million persons in 2019-20, which fell to 28 million in the June 2020 quarter but had recovered almost all the 33 million job losses by the December 2020 quarter.