Impact of Lockdown on Labour in India
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Impact of Lockdown on Labour in India Mahesh Vyas1
© Indian Society of Labour Economics 2020
The COVID-19-induced lockdown is an unprecedented event. It has rendered millions of people unemployed for an extraordinarily long period in the interest of saving lives from an uncontrollable virus. The lockdown began slowly and hesitatingly in mid-March as many state governments announced local lockdowns till the end of March. But, the nation-wide lockdown that began on 25 March was unparalleled. It was severe, prolonged, confusing and unpredictable in multiple ways. The impact of this lockdown on the economy was devastating. The index of 8-core industries fell by 38.6% in April. Three months later in June 2020, the index was still 15% lower than it was a year ago. Professional forecasters’ estimates compiled by Reserve Bank of India (RBI) during late July–early August 2020 showed that real GDP was expected to shrink 22.8% in the quarter ended June 2020 compared to the corresponding quarter a year ago. What could the impact of this draconian lockdown be on labour markets and employment? India has had a unique distinction of maintaining high real GDP growth with no growth in employment for a very long time. Could its economy also shrink without impacting employment? While India has improved the frequency with which it releases most macroeconomic indicators, its official machinery is still incapable of providing corresponding employment and unemployment estimates. And, the nature of the lockdown is such that historical data from past labour surveys could be a poor guide to guess its impact. CMIE’s Consumer Pyramids Household Survey (CPHS) is best suited to guide us on the impact of the lockdown on employment and labour markets because of its currency. CPHS began in January 2014 and has continued uninterrupted since then. Its execution did not stop during the lockdown. This is a longitudinal panel household survey with a total sample size of 174,405 households. The entire sample is surveyed during a Wave that lasts four months. Three Waves of the survey are completed every year.1 1
See consumerpyramidsdx.cmie.com for more details about this survey.
* Mahesh Vyas [email protected] 1
Centre for Monitoring Indian Economy P Ltd., Mumbai, India
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Vol.:(0123456789) ISLE
The Indian Journal of Labour Economics
The CPHS survey execution is designed to enable fast-frequency estimates. This is possible from the subsample of 43,500 households surveyed per month and 11,500 households surveyed per week. The CHS execution machinery ensures that every major stratum is surveyed uniformly across the four months and the 16 weeks of the survey. This is what enables the generation of reliable fast-frequency measures from CPHS. CPHS was a CAPI survey conducted using GPS-enabled handheld devices before the lockdown. During the lockdown, this survey execution system switched to a telephonic survey administered on the same panel sample and using the same questionnaire that was deployed before the lockdown. The telephonic survey was
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