Covid-19 Impact On Employment In India-Unemployment Rate In India Due To Coronavirus

Covid-19 Impact on Employment & Economy in India


India’s unemployment rate is still high despite the fact that the country was placed under lockdown to stop the spread of deadly COVID-19 last March 25, 2020. Covid-19 impact on employment in India and unemployment rate in India due to coronavirus. The pandemic-induced job losses have not abated consistently since then.

To stop the spread of the pandemic, the government had instituted a lockdown. However, this negatively impacted economic and business activity. It also led to job losses and the exodus from migrant workers that rocked the nation.

The Unemployment Rate in India due to Coronavirus as of March 2021

The Centre for Monitoring Indian Economy’s (CMIE data) shows that the February 2021 unemployment rate in India was 6.9 percent. This is slightly higher than the 7.8 percent recorded in February last year, and 8.8 percent in March 2020 when the lockdown was imposed.

According to data, the unemployment rate in India peaked at 23.5 percent in April. It remained at 21.7 percent in May. The unemployment rate began to fall from June when it was at 10.2 percent. In July, it rose to 7.4 percent.

According to CMIE data, however, the unemployment rate in India due to coronavirus rose slightly to 8.3 percent in August, and to 6.7 percent in September. According to data, October saw a slight increase in unemployment to 7%. It then fell to 6.5% in November. The same statistical source states that the unemployment rate rose to 9.1 percent at the beginning of winter of 2020. It improved to 6.5 percent in January.

You should also read about how Covid-19 has impacted the payments landscape in India as well.

Covid-19 Impact on Employment in India

Experts stated that although the CMIE data showed improvement in unemployment from July, there was still a need to maintain consistency. Covid-19 impact on employment in India is much on the higher side. This would be possible only if the manufacturing and service sectors experience increased buoyancy. They agreed that while the farm sector is doing well, with over 55 percent of the population engaged, there are still areas of improvement in the hiring process in urban and industrial areas.

People left without much of an opportunity for jobs are seeking new alternatives to make money for a living. There has been a growing number of Indian professionals registering international job outsourcing platforms such as Upwork and Freelancer to seek offshore opportunities. Furthermore, people have got engaged in daily trading activities on various financial markets which can be observed through the increasing demand on Forex demo trading account to learn the basics of trading in currency markets. While these alternatives do work in most cases, they are not enough to save unemployed Indians from extreme poverty in the upcoming times.

While the government has made many efforts to increase new hiring in the country, it is still necessary to continue to implement policy interventions and monitor existing initiatives and schemes at the ground level to ensure a steady improvement in the employment situation in the country.

What can the Indian Government do to Slow Down Spiking Unemployment?

According to data from the labor ministry, approximately 16.5 million people have benefited from the Aatmanirbhar Bharati Rozgar Yojana (ABRY). This was launched in October in order to encourage hiring during the COVID-19 pandemic that lasted until March 9, 2021.

This scheme was implemented on October 1, 2020, to encourage the establishment of new jobs, social security benefits, and the restoration of lost employment during the pandemic.

This scheme is implemented by the Employees Provident Fund Organisation, (EPFO) and attempts to decrease the impact of the financial burden on workers in different industries/sectors. It encourages them to hire additional workers. The ABRY allows the Government of India to credit for two years both the employers’ and employees’ shares (12 percent of the wages) of the contribution payable.

The ABRY has approximately 16.5 lakh beneficiaries who registered with the Scheme starting October 1, 2020. Of these, around 13.64 million are novice joiners with UANs (universal account numbers) generated after October 1, 2020.

Approximately 2.86 lakhs of them are re-joinees, those who were made unemployed by the pandemic between March 1, 2020 and September 30, 2020. They rejoin the Scheme starting October 1, 2020.

Experts stated that the government aims to create between 50 and 60 lakh jobs via the ABRY within two years. However, it needed to be closely monitored and planned for implementation in order to reach the desired goal.


Covid-19 impact on employment in India will last for many years. The unemployment rate in India will take some more time for correction due to Coronavirus. Currently, Aatmanirbhar Bharati Rozgar Yojana (ABRY) is one of the best scheme and one should take benefit of it.

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