As is the case in many other countries, the crisis in India sparked by the Covid-19 pandemic is not purely a health crisis but also an economic and social one. For the Indian economy, the loss of income caused by the nationwide lockdown declared on 24 March, which will last far longer than the three weeks initially planned, is colossal. On the employment front, the impact of the crisis and the structure of the labour market reinforces anomalies that are peculiar to India and also threatens to undermine efforts to correct these.
In the second quarter of this year, India’s gross national product contracted by 23.9%, far more than the forward-looking assessments had predicted, while unemployment reached a record level of almost 25% at the end of May, with the nationwide lockdown set to end on 30 June. By September, the unemployment rate had shrunk to less than 8%, but the country now has 5.5 million cases of coronavirus – compared with less than 100 at the end of March – and economists are forecasting a contraction in GNP for 2020 of between 9% and 15%.
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