Covid Second Wave: 7 Million Indians 'Lost Jobs' In April; Aviation Industry On Verge Of Collapse

According to CMIE data, the number of employees, both salaried and non-salaried, fell from 398.14 million in March to 390.79 million in April, in the third straight month of falling jobs.

Covid Second Wave: 7 Million Indians 'Lost Jobs' In April | Representative Image

With the Covid-19 Tsunami sweeping through the country, it's proving to be the toughest time for people and its major impact can be seen on jobs as the unemployment rate rose to a four-month high of nearly 8 percent in April.

As states are registering a surge in infections, medical infrastructure is crumbling as a result of an acute shortage of medical supplies. However, the economic outlook remains weak with states imposing or extending lockdowns to break the chain of the virus.

READ: CM Nitish Kumar Announces Complete Lockdown In Bihar Till May 15; Detailed Guidelines Soon

The unemployment level rose to 7.97 percent in April from 6.5 percent in March, with more than seven million jobs lost last month, according to data from the Centre for Monitoring Indian Economy Pvt, (CMIE) a private research firm.

According to CMIE data, the number of employees, both salaried and non-salaried, fell from 398.14 million in March to 390.79 million in April, in the third straight month of falling jobs.

In the absence of real-time employment data from the government, most economists rely on the CMIE data, as it reports joblessness being more acute in urban areas as laborers return to their villages.

CMIE Managing Director Mahesh Vyas said the job availability has been impacted most likely due to lockdowns. "Since the virus is still quite intense and we are stressed on the medical health-services front, it's likely that the situation will remain tense in May as well," the Bloomberg report quoted Vyas.

On the other hand, Barclays Bank Plc also lowered its forecast by one percentage point to 10 percent, as "there is growing uncertainty around the number of cases and fatalities," the report quoted economist Rahul Bajoria saying in a research note.

Another survey by IHS Markit pointed at the manufacturing sector still losing jobs in April, even as the rate of contraction was the weakest in the current 13-month sequence of job shedding.

Meanwhile, the second wave can also cause the collapse of the domestic aviation sector, as per the aviation consultancy firm Capa India.

In its latest report, it said the situation will also accelerate consolidation in the industry, resulting in two to three airlines operating in the domestic sector, down from six major airlines and three regional carriers that currently operate in the space.

The report titled ‘Key Trends in Indian Aviation in FY2022: Impact of Second Wave’ shows the impact on the industry. The industry will report serious losses in FY2022, similar in scale to that in FY2021, with downside risk in the event of a protracted second wave, or the emergence of a third wave, the report said. Many Indian airlines will struggle to recover from two consecutive years of such massive losses, it noted.

As per the report, IndiGo will be the only carrier to emerge from the crisis significantly stronger because of its very strong balance sheet, report said. “Consolidation is inevitable and will be strategic in nature. It could result in a 2-3 airline system in the near to medium term," the report mentioned.