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BY DR. GYAN PATHAK
There were 1.3 crore more entrepreneurs in India in 2022 compared to 2018, but there were 1.4 crore people
less in employment – 45 lakh fewer men and 96 lakh fewer women – in October 2022 compared to January
2020. Younger unemployed persons are the worst hit by such a Job market distortion.
The latest CEDA CMIE Bulletin Booklet released last week by the Asoka University’s Centre for Economic
Data and Analysis has come out with the data after analysing the “Impact of the Covid-19 Pandemic on
People’s Economic Lives” as seen through CEDA-CMIE bulletins in 2021 and 2022.
Under “The Long Road to Recovery” the authors Preetha Joseph and Raashika Moudgill said that
employment, hit hard during the initial months of the COVID-19 pandemic, is yet to return to pre-pandemic
levels. Women and younger individuals (15-39 years old) have been hit harder by unemployment in the past
three years. In a return to pre-pandemic trends, the services sector now employs the largest share of India’s
workforce. Changes in overall employment following the first Covid-19 lockdown seem to be primarily driven by
fluctuations in rural employment during this time.
Women were less likely to be part of the formal workforce than men even before the pandemic, but they lost
employment in greater proportions when the lockdowns were imposed.
The younger population has been hit more compared to older adults. As of October 2022, about 20 per cent
fewer people in the age group of 15-39 were employed as compared to January 2020. However, among older
age groups (40-59), the number of people employed in October 2022 has seen an increase – an additional 25
million compared to January 2020.
Urban employment in the past 3 years has remained relatively stable following the initial months of stringent
lockdowns. Compared to January 2020, only 0.4 million more individuals were employed in urban India while
rural India employed 15 million fewer individuals as of October 2022.
Though agriculture sector continued to employ a rising number of individuals since the first lockdown, it has
slowed down in the past year. In 2019-20 and 2020-21 there was 4 per cent increase in agriculture employment
but it had slowed down to 2.6 per cent in 2021-22.
Decrease in rural employment in June 2022, for example, was driven by a fall in agricultural employment.
This coincided with the delayed southwest monsoon that may have impacted employment for Kharif sowing. On
the other hand, the decrease in rural employment in October 2022 seems to be due to a decrease in
manufacturing and service sectors, while employment in agriculture rose by over 5 million.
Overall, employment in the real estate and construction sector seems to have returned to pre-pandemic
levels in 2022. Employment in manufacturing has shown slow and only partial recovery. Around 6million fewer
individuals are employed in this sector as of October 2022, compared to average employment in the sector in
the years 2018 and 2019.
The services sector, India’s largest employer, now employs around 147 million people. This sector too saw a
shrinking of jobs during the pandemic and is yet to touch the pre-pandemic numbers of the workforce. Within
services, it is the wholesale and retail trade sector that has seen remarkable expansion. The sector did not
contract significantly even during the pandemic years, and is now employing over 70 million people compared to
59million in FY 2018-19.
Financial services sector too has seen an uptick in the number of people employed over the years. In FY
2021-22, the number of people employed in the sector grew by 16.1 percent as compared to the previous year.
The workforce of the Information Technology and Information Technology enabled Services (IT and ITeS) sector
also grew by 11 percent between FY 2020-21 and FY 2021-22.
Hotels and tourism, a big employer within services, has not seen similar growth and is still to reach pre-
pandemic levels of the workforce. Within the sector, more than hotels and restaurants, it is the travel and
tourism sector in particular that has seen the workforce shrink in recent years. Other sectors within services are
also still to go back to employing similar numbers of people as they did pre-Covid-19.
Small traders and wage labourers continue to make up the largest share of employed workers. However, the
share remains lower than the pre-pandemic period, at around 27 percent of employed workers, as compared to
42 percent in 2016 and 32 percent in 2019.
Overall, the number of farmers and entrepreneurs has followed a rising trend before and during the
pandemic. The rise in the number of entrepreneurs has been quite significant – There are 13 million more
entrepreneurs in 2022 as compared to 2018. The number of individuals employed as salaried workers and small
traders/wagelabourers were on the decline prior to the pandemic and have not recovered to previous levels as
of 2022.
Household incomes, wages, expenditure, savings – all took a sharp hit during the pandemic. Urban
household incomes shrank more than rural ones. By June 2022, incomes were marginally higher than in the
beginning of 2020, bur urban India is yet to exceed those levels. By October 2022, chit funds, life insurance,
and provident fund became the most popular ways to save. By June 2022, average monthly wage was only Rs
4,015 (urban Rs 5,439 and rural Rs 3,350).
Ashwini Deshpande, professor of Economics at the Ashoka University and Director at Centre for Economic
Data & Analysis (CEDA) and Mahesh Vyas, the Managing Director and Chief Executive Officer at the Centre for
Monitoring India Economy (CMIE) have provided a clearer view in this compilation showing how the economic
lives of individuals and households have seen a marked shift in the last three years of the pandemic.
The compilation has highlighted how several of the problems that COVID-19 exacerbated, existed pre-
pandemic. “We fear that the problems may continue to plague us, unless we develop appropriate policy
responses,” the authors said. “The two big questions that still beg answers are – how do we build a better
health infrastructure and how do we deal better with an income shock to a large section of society?”
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