Impact of Covid on different sectors

Even before the Covid-19 crisis, India had been experiencing slower economic growth and rising
unemployment.

Unemployment went from 8% in March 2020 up to nearly 24% in April 2020. According to Centre for
Monitoring Indian Economy (CMIE), the unemployment rate was around 12% at the end of May
2021.

Inflation rates on goods and services including food products and fuel rose. Social distancing resulted
in the job losses, specifically those in the informal sector.

COVID exposed the vulnerability of urban casual workers, many of whom are migrants. They were
among the first to be affected by the lockdown measures as economic activities were halted
threatening survival.

The COVID-19 pandemic was not just a health crisis, but also an economic and
labour market crisis. The lockdown measures adopted in most countries to
prevent the spread of the pandemic restricted economic activities.
Even before the Covid-19 crisis, India had been experiencing slower economic
growth and rising unemployment, It just worsened what was already a
joblessness crisis in early 2020 with and the lockdown measures.
During the lockdown, unemployment increased from 8% to 24.3% between
March and May  [CMIE]. According to Centre for Monitoring Indian Economy
(CMIE), the unemployment rate was around 12% at the end of May 2021 which
means that about by 1 crore people lost their jobs during the period due to the
2nd wave of corona pandemic.
A damaging impact on an economy as large as India’s caused due a total
lockdown was imminent. This was possibly a result of a decrease in demand as
well as the disruption of workforce faced by companies. (add graph)

COVID-19 has also exposed the vulnerability of unorganised workers, many of

whom were migrants. They were among the first to be affected by the
lockdown measures as economic activities were halted, threatening their
survival. Since in most urban units, the jobs are linked with accommodation at
the workplace and unemployment may have forced these workers to vacate
their homes as well. With little choice, they are forced to return to their village.
With limited data available on inter-state migration and employment in
informal sectors, it is difficult to figure the numbers of migrants who lost jobs
and accommodation during the pandemic. However, using different available
data sets, the ILO estimates they are at least five million or possibly much
higher.
For enterprises, the impact of COVID-19 has been uneven for different regions,
different sectors and different populations. Majority of employers operate
businesses in the hardest-hit sectors of manufacturing, accommodation,
wholesale, retail trade, real estate and other business activities. Restrictions on
movement have had a direct impact on trade, and especially on retail trade,
and it persisted with the lowered demand. Manufacturing had already
experienced a slowdown due to a decline in both domestic demand and
exports. The impact of lockdown on construction was direct and immediate as
construction largely ceased.
 Primary sector

This includes Agriculture and allied activities such as livestock, fisheries, and so forth. Horticulture
and food grains

Agriculture and allied sector were hit disproportionately with horticulture, poultry facing being
worse off.

Agriculture relies heavily on casual labour and self-employment. Since it was not affected directly by
the containment measures, the sector became the refuge employer during the economic slowdown.

Primary sector

Agriculture and allied activities

To contain the spread of COVID‐19, just like how other countries did, India
imposed a complete lockdown in march which coincided with the peak of
harvesting season in India which posed significant losses to the farmers.
Transport constraints, mobility restrictions and lack of workers due to reverse‐
migration of labourers to their native places were the major problems.
Before this pandemic, the rural economy of India was witnessing a decline in
incomes of mainly casual workers. Some rays of hope were seen in January
2020 when food prices started rising but all this collapsed with the new crisis.
Agriculture and allied activities are an umbrella of different activities which
includes on crops, livestock, fisheries, dairy, Horticulture and Food grains. All of
them were impacted in different ways. Food grains are non‐perishable, and
apart from problems in harvesting and labour shortage, it wasn’t impacted
much. On the other hand, Horticulture, mainly fruits and vegetables, faced the
brunt of this due to their perishable nature, declining demand and the
reduction in their exports. In livestock which includes milk, meat, eggs and so
on, milk had more stability over poultry and eggs which might have been an
effect of what used to come on the news channels regarding a correlation
between chickens and covid.
But overall agricultural sector is seen as a bright spot and less affected
compared with the losses incurred by other sectors, since it relies heavily on
casual labour and self-employment. So it wasn’t affected directly by the
containment measures and this sector became the refuge employer during the
pandemic.
 Secondary sector

The manufacturing sector is the major contributor of GDP and employment in the secondary sector.
These activities include manufacture of automotive components, paper, textiles, tea factories, etc.

Indian manufacturing had already experienced a slowdown due to a decline in both domestic
demand and exports

This sector is badly hit due to reduced cash flows, supply chain disruptions, shortage of migrant
workers due to reverse migration, less demand.

According to the Ministry of Statistics and Programme Implementation, India’s Industrial Production
fell by 16.7% year-on-year in March 2020. Which was the steepest decline since 1994.

Secondary sector
These activities included manufacture of automotive components, bicycles,
paper, textiles, and ceramics, as well as foundries, tea factories and rice
milling.
Manufacturing employs 22 % of unorganised workers. Over recent years,
Indian manufacturing had already experienced a slowdown due to a decline in
both domestic demand and exports. The 2 years prior to covid, that is 2018-19
and 2019- 20 the growth of manufacturing fell from 6.9 to 2.0 per cent.
Businesses reported cash constraints, supply chain disruptions, shortage of
workers due to reverse migration and less demand.
The manufacturing sector is the major contributor of GDP and employment in
the secondary sector and is an engine for growth and creation of the nation's
wealth. The manufacturing sector has strong links with other sectors, primary
and tertiary, so any impact on this sector affected other sectors as well.
The automotive sector, which is about 50% of the manufacturing sector was
suffering before COVID‐19 too due to low consumer demand. There is a lot of
pressure due to demand–supply disruptions on the health of the auto sector in
India due to COVID‐19.
The micro, small and medium enterprises (MSMEs), form a significant share of
manufacturing in India and play a crucial role in providing employment
opportunities and exports. They were badly hit due to reduced cash flows and
lower demand.
It is not easy to re‐start MSMEs once they are shut down. Small industries are
most vulnerable and it is difficult for them to survive without financial aid.
According to the Ministry of Statistics and Programme Implementation, India’s
Industrial Production fell by 16.7% year-on-year in March 2020.2 It is the
steepest decline since 1994
 Service sector

The service sector is key driver of economic growth and largest contributor of GDP This includes
activities such as banking transport, aviation, Insurance, tourism and other services

Aviation and Tourism were the first industries that were hit significantly by the pandemic.

The restrictions due to the second wave have again crippled the tourism sector, which was struggling
to recover from the initial losses suffered by businesses in 2020.

The pharmaceutical industry has been on the rise since the start of the Covid-19 pandemic,

Transport sector is partially surviving with some urban businesses still operating because of
increased use of home delivery systems.

Service sector
Service sector, which is the key driver of economic growth and largest
contributor of GDP, has been hit hard due to various restrictions on mobility
and halt on tourism and hospitality. During the crisis, workers have lost their
jobs as long-distance movements of people and goods across states had been
stopped.
The contribution of the Aviation Sector to our GDP stands at about 2.4% and
and Tourism 9.2% respectively. The Tourism sector served approximately 43
million people in FY 18-19. Aviation and Tourism were the first industries that
were hit significantly by the pandemic and have been dealing with severe cash
flow issues since its start. They are staring at a potential 38 million lay-offs,
which is about 70% of the total workforce.
According to the Indian Association of tour operators, the hotel, aviation and
travel sector together may incur a loss of around 8,500 crores due to the
restriction imposed by the Indian government on the movement of flights.
The restrictions due to the second wave have again crippled the tourism
sector, which was struggling to recover from the initial losses suffered by
businesses in 2020. Many smaller establishments may not be in a position to
resume their businesses again after the second wave subsides.
The stock market has also seen the worst in March, 2020 due to the lockdown
and collapse of various business activities.
However, the pharmaceutical industry has been on the rise since the start of
the pandemic in India, who was the largest producer of generic drugs globally. 
Transport sector is partially surviving with some urban businesses still
operating because of increased use of home delivery systems. The past few
years also pushed the mechanism of remote working so employees could work
from home.

Other Demographics affected

Women are more likely to be vulnerable to losing their jobs as compared to men due to the
COVID‐19. since mid-2020, women have lost work first, even after the lockdown ended; and
this trend has continued into 2021. CMIE data also stated that while women accounted for
only about 10.7% of the total workforce in 2019-20, they formed about 13.9% of the job
losses India witnessed in April 2020. While most men recovered their jobs, women did not
have the same fate.
Gender gap and inequality
It has been estimated that globally, women are more likely to be vulnerable to losing their
jobs as compared to men due to the COVID‐19 pandemic. 13
The drop in employment is found to be biased and not gender‐neutral in India which has one
of the most unequal gender division of domestic work globally. The drop in absolute number
is more for men compared with women because of the already existing large gender‐gap in
employment. By comparing the pre and post lockdown hours spent on domestic chores, a
decline in gender gap is found in terms of hours devoted to domestic chores on an average
during the first month of lockdown in most of the states. Also, there is an increase of 0.5 to 4
hours in men's proportion of housework post‐lockdown. Still, the male
proportion/distribution continues to be skewed to the right (Deshpande, 2020).
Considering the disproportionate burden of the crisis on low skilled workers, poors, other
vulnerable sections, many economists think that COVID‐19 is most likely expected to raise
inequality within and among countries (Initiative on Global Markets, 2020) and the results of
study conducted by (Furceri, Loungani, Ostry, & Pizzuto, 2020) confirms that those having
basic education (low skilled) are affected more than those with higher and advanced degrees,
in terms of loss of income hence confirming increase in income inequality after during and
after pandemics.
As per Centre for Monitoring Indian Economy (CMIE) estimates, between mid-2016 and
early 2020, the female labour participation rate, which is the percentage of women working
out of all women falling in the working age, fell from 16.4% to about 11%. And now, it has
been estimated that this number might have further been pushed this figure down to 9% due
to the pandemic. CMIE data also stated that while women accounted for only about 10.7% of
the total workforce in 2019-20, they formed about 13.9% of the job losses India witnessed in
April 2020. What’s worse is the fact that by the time November rolled about, while most men
recovered their jobs, women did not have the same fate.

Women are marginally more likely than men to be in non-regular

employment. Thus, COVID-19 has increased vulnerability of women
employment and has further added care work responsibilities in this time.
Women’s labour participation numbers were declining even before the
pandemic with the increased engagement of women in education and with
domestic duties not being classified as ‘work’. The rapid assessment
estimates that together, 181 million people in households, mostly women,
engaged in domestic duties or unpaid family businesses, are bearing the
brunt of the increased care and work burden.
 according to the Centre for Monitoring Indian Economy (CMIE), since mid-2020, women have lost
work first, even after the lockdown ended; and this trend has continued into 2021.
Conclusion

more attention is needed toward the vulnerable sections of the society and sectors especially poor
people, MSMEs and the non‐essential commodities sector who is worst hit in this demand
contraction due to pandemic.

The study reveals that Indian professionals are looking for new and different types of
work, with 59 per cent of them actively searching for a job. More than 1 in 3 (35 per cent)
employed professionals in India saw their pay cut as a result of Covid-19. More than 2 in
3 (68 per cent) jobseekers are looking to switch industries as a result of the pandemic.
About 1 in 3 (33 per cent) of them are looking for a new job right now where they can do
more meaningful work.

Demand for restaurants and retail may decline.

Though the automotive and FMCG sectors in tier-2 cities have
performed poorly, the recruitment situation in IT, Outsource,
Technology, E-commerce, Pharma and Health Care sectors in metro
and tier-1 cities
As per CMIE data, employment had returned almost to pre-pandemic levels
by the end of 2020, but incomes remained significantly depressed and
around 15 million workers still remained out of work 
the potential WFH workers constitute 19% of the workforce which is an increase from 16% in
2011–2012. In India, urban areas have higher share of WFH workers than the rural areas
(see Table 1). This remains true for both male and female workers. A larger share (21%) of
the female labour force is employed in WFH occupations than their male (19%) counterparts.
Such pattern could be an outcome of gender roles assigned to occupations and more
flexible occupations preferred by the women. It has been observed that more women work in
cognitive jobs, while more men work in manual jobs

Karnataka and Kerala clearly stand out with the highest share of WFH workers among these
states. Around 40% of non-farm workers in Karnataka and 30% in Kerala are employed in
jobs that can be potentially done from home. It is not surprising given that Karnataka also
houses the IT hub of the country.
As many as 6.1 million young people