Finding Work Is Work In Progress

Economic activity is back at pre-pandemic levels, but jobs recovery is a long haul

- Sonal Varma

The economic news out of India is encouraging, with a swifter-than-expected recovery from the second wave. The Nomura India Business Resumption Index, which tracks the pace of business resumption, crossed a milestone in mid-August, rising above its pre-pandemic level of 100 for the first time since the pandemic began last year. However, despite the sharp economic rebound, the job market challenges appear daunting.

How has the pandemic affected jobs?

Getting a true pulse of the employment situation in India is difficult, mostly due to the absence of timely jobs data. Yet, the inference from various surveys seems clear: Workers have borne a disproportionate economic hit due to the pandemic.

Similar to its impact on growth, the pandemic has also resulted in an uneven impact on the jobs market. For high-skilled jobs in sectors such as IT and finance, the shift to work-from-home (WFH) was easier, but WFH is not feasible in contact-intensive services such as hotels, restaurants, travel and tourism, which require physical close proximity or in low-skilled jobs in the manufacturing and construction sectors.

The pandemic has had a K-shaped impact. Small firms have been hit harder than big firms. Consequently, the employment-intensive micro, small and medium enterprises (MSME) sector has had no option but to cut wage costs to remain afloat. Informal sector workers, self-employed and daily wage labourers have been significantly affected.