The Impact of the Covid-19

Pandemic on People’s
Economic Lives
As seen through CEDA-CMIE Bulletins

in 2021 and 2022
Index
01 02
Introduction: Reflections A note on the booklet and
on Covid-19’s impact on on the data

people

Section I - Covid-19 pandemic: Shifts in employment patterns

04 06 08
Monthly employment The sharp decline in Covid-19 and jobs: The big
trends in 2020
manufacturing jobs
setbacks

12 15 19
India’s shrinking female The challenge of youth Shifts in occupational
workforce unemployment
trends

22
Conclusion: The long road
to recovery

Section II - Covid-19 pandemic: Impact on earnings, expenditure and savings

26 28 30
Lockdown’s impact on The brunt borne by Shifts in savings
income and wages household expenditure
preferences - I

32 35
Shifts in savings Conclusion: How Covid-19
preferences - II has changed household
financial flows
Reflecting on
Covid-19’s impact
on people
by Ashwini Deshpande and
Mahesh Vyas

Ashwini Deshpande is a Professor of Economics at Ashoka University and Director at the Centre for Economic Data &
Analysis (CEDA) and Mahesh Vyas is the Managing Director and Chief Executive Officer at the Centre for Monitoring
Indian Economy (CMIE)

Nearly three years since the outbreak of The calamity caused by Covid-19 has been think it is an opportune time to revisit the
Covid-19, we now have a clearer view of staggering. Devastation has touched analysis and think of the disruption afresh
how the pandemic disrupted economies people’s lives in disruptive and nimble as we set out to move ahead.

around the world. In India too, the ways, many of which are possibly yet to  

economic lives of individuals and
households have seen a marked shift in this
period - from how much they earn and
what jobs they do, to how they save. What
had started as a health emergency soon
reveal themselves in their full measure.
Through this period, it has been our
endeavour to make sense of and document
how our economic realities are shifting
from a range of vantage points.
This compilation not only presents our
real-time analysis of the last two years, it
also highlights how several of the problems
that Covid-19 exacerbated, existed pre-

pandemic. We fear that the problems may

rendered millions of people, especially
those from poorer households, without
jobs, and by consequence, without income
and struggling to secure the basic needs of
life.
continue to plague us, unless we develop
Through much of 2021 and the first half of appropriate policy responses. Gender
2022, our CEDA-CMIE bulletins have disparity and discrimination are not only
been trying to do just that – bring readers a the biggest survivor of the pandemic shock

closer look of how the pandemic has
impacted everyday financial flows and
In April 2020, the first full month with a employment. For this, we have relied on
stringent lockdown, an estimated 113 CMIE’s Consumer Pyramids Household
million Indians lost their jobs as compared Survey (CPHS), a continuous fast-
to the number of people employed in frequency survey conducted on a panel of
March 2020. A bulk of these job losses households.
but they have, unfortunately, also
demonstrated greater resilience to these
shocks. Covid-19 chillingly brought home
our individual and collective vulnerability
to unanticipated negative shocks. We know
what the fissures are. This publication

serves as a reminder of what we endured.

were recorded in rural areas, where 73 Now that we are emerging on the other
million people suffered the plight.

Our teams have looked at the data from side of the pandemic, we should utilise the
CPHS to understand not only overall shifts lessons learned to restructure and reorient.

With jobs disappearing, household incomes
plummeted. Rural monthly income saw a
decline of 19 percent in April 2020 as
compared to the previous month. In urban
areas, the drop was 41 percent. This
constrained households’ ability to spend,
and to save.
in employment, but have also tried to
answer a range of questions – from “what
happened to employment during the
pandemic?”, to “who was hit harder by job
losses during the pandemic?”. We have
looked at women’s workforce
The calamity and our sufferings will not be
wasted if we fix our vulnerabilities,
particularly with respect to our health
infrastructure and the precarious nature of
employment of a very large section of our

participation, youth employment patterns,

workforce. The two big questions that still
and what was happening in agricultural beg answers are – how do we build a better
Many of these facets of people’s economic jobs. We also tried to make sense of the health infrastructure and how do we deal
lives were already on a downward trend impact of the pandemic on household better with an income shock to a large
before 2020, but the pandemic shook them earnings, spending and intention to save. 

section of society?
profoundly. While we have seen recovery
on almost all fronts, we are yet to return to As 2022 ends and we move into a new -
levels of employment that we had before and hopefully Covid-free - year, we bring
Covid-19 hit.  you a compilation of these bulletins. We
01
A note on the data 
All data used across sections is from
CMIE’s Consumer Pyramids Household
Survey (CPHS).  The CPHS is a
continuous fast-frequency survey
conducted on a panel of households. Its
sample consists of 178,677 households and
over 875,000 household members as of
2022. 
Wave.
The survey covers almost all states in
India. A stratified multi-stage survey design
was deployed by CMIE to draw its sample
of households. The Primary Sampling
Units (PSUs) were the villages and towns
of the 2011 Census. The Ultimate
Sampling Units (USUs) were the
households from these PSUs. The sample
currently covers over 320 towns and 3900
villages across the country. 
Employment and savings data is captured
The entire survey is conducted three times
every year. Each survey Wave takes place
over a span of 4 months.  The survey
captures data on demographics,
employment, education, health, etc of
household members once in every Wave.
A note on how this booklet is arranged
This booklet includes ten bulletins
published through 2021 and 2022 compiled
under two broad sections - the first one
brings together bulletins that analysed data
on employment and jobs, while the second
section comprises bulletins related to
household financial flows – incomes,
expenditure and saving. 
Household level data on asset ownership,
household amenities, savings and
borrowing, etc are also captured once every
Wave. The CPHS also captures monthly
expenses and income data. Income and
expenses for the four months preceding
survey interview is captured in every
Thus, a monthly time series is constructed
for both categories. As it takes four months
to complete the execution across the entire
sample, there is a four month lag in
availability of Income and Expenses data.
Therefore, as of November 2022, income
and expenses data was available till June
2022.
as of the survey interview data. A
representative 1/4 of the entire sample is
surveyed every month and estimates of
employment and savings are generated for
the monthly sample. Thus, as of November
2022, employment and savings data was
available till October 2022.
The ten bulletins have been republished in
their original form, but both sections
include a new concluding segment that
brings readers an updated understanding on
where we stand on each of these indicators.
02
 Covid-19 Pandemic:
Shifts in Employment
Patterns

03
 1 Originally published on:
Jan 17, 2021
by Ashwini Deshpande

Monthly The post-lockdown recovery in employment was

short-lived. In December 2020, the unemployment
Employment rate was 9.1 percent, the highest since the national
Trends in 2020 lockdown in April, 2020.

Key Insights Change in employment

Since the national lockdown in (All figures in millions)
March’20-April’20, unemployment
rate rose every month and peaked
in December 2020 at 9.1 percent

Figure 1: By Sector Rural Urban

Rural employment started declining +60

from February 2020, with April 2020
recording 73 million rural job losses +40
compared to March 2020


+20

Given the pre-existing gender gaps 00

in total employment, more men lost
-20
jobs in April 2020 compared to
women

-40

-60
The biggest loss of employment due
to the national lockdown in -80
March’20-April’20 was seen among
hawkers and daily wage workers -100
Jan 20

Feb 20

Mar 20

Apr 20

May 20

Jun 20

Jul 20

Aug 20

Sep 20

Oct 20

Nov 20

Dec 20
As CMIE figures show, the post-lockdown
recovery in employment was short-lived.
In December 2020, the unemployment rate
was 9.1 percent, the highest since the Figure 2: By Gender Female Male
national lockdown in April, 2020. Every
month since April, 2020, employment has +60
been lower than the corresponding month
in 2018 and 2019, according to CMIE data.
+40
In this bulletin, we show how the monthly
change in total employment since the +20
Covid-19 pandemic began varies by rural- 00
urban location, male-female workers, and
by broad occupational groups.

-20

All the figures show the change in -40

employment month-on-month (m-o-m). As -60
Figure 1 shows, the decline in rural
employment started in February with over -80
6 million fewer employed compared to
January. The decline in rural employment -100
continued in March, with April recording
Jan 20

Feb 20

Mar 20

Apr 20

May 20

Jun 20

Jul 20

Aug 20

Sep 20

Oct 20

Nov 20

Dec 20

73 million job losses compared to March.

Employment in rural India recovered
through May-July, to decline again till
December, barring a recovery in
September.

04
Figure 2 shows the monthly change in
Figure 3: Change in employment
employment by gender. Given the pre-

existing gender gaps in total employment, (All figures in millions)

more men lost jobs in April, 2020,

compared to women. The recovery in By Sector

employment between May and August was

also overwhelmingly male. In August +40

2020, fewer women were employed

compared to July. Male employment +20

increased in August, September and

October (m-o-m basis), but the magnitude

00
of increase was far lower compared to May

and June. Female employment declined in

-20
October, November and December. In

November and December, male

employment declined compared to the -40

previous month.

-60

Figure 3 shows the monthly changes in

employment by occupation. The biggest

-80
loss of employment was seen in the
Jan 20

Feb 20

Mar 20

Apr 20

May 20

Jun 20

Jul 20

Aug 20

Sep 20

Oct 20

Nov 20

Dec 20
hawkers and daily wagers category. Their

employment recovered through May-July,

but declined in August and October, with

smaller gains in September, November and Hawkers &

Business Salaried Farmers Others
December. Salaried workers’ employment Daily Wagers

declined between February and May, with

the largest decline in April. Subsequently,

it started to recover in September but

declined in November. Individuals who

report their main occupation as

“Businessmen” also suffered a sharp

decline in their employment status in April,

but the recovery subsequently has been

steadier compared to other categories of

employment. Farmers’ employment has

been fluctuating but since they are self-

employed, the change in employment for

this category mirrors the sectoral change

(rural/urban) in employment.

05
 2 Originally published on:

May 06, 2021

by Ankur Bhardwaj

Manufacturing accounts for nearly 17 percent of India’s

The Sharp Decline GDP but the sector has seen employment decline sharply

in the last 5 years. From employing 51 million Indians in

in Manufacturing
2016-17, employment in the sector declined by 46 percent
Jobs to reach 27.3 million in 2020-21.

Key Insights
Agriculture, financial services, non- Employment in the manufacturing The decline in employment predates
financial services, and public sector declined by almost 50 percent the pandemic but was exacerbated

administrative sectors accounted from 2016-2017 to 2020-202 1


during the pandemic, across sectors

for 69 percent of total employment

in 2016-17 and 78 percent in 2020-21

Employment in the real estate and

construction sector has been on the

Employment in agriculture has seen decline since 2017 and sa w a steep

a yearly increase from 201 9 to 2021

 fall during the pandemi c



With the second wave of the coronavirus

Figure 1: Employment by sector
pandemic battering India at present, the
Indian economic outlook looks bleak for (All figures in millions)

the second year in a row. In 2020-21,

India’s real GDP growth is estimated to be
160
minus 8 percent. This would also put Agriculture

pressure on India’s employment numbers.

140
In previous bulletins, we have analyzed the Non-financial

impact of Covid-19 pandemic on Services

120
employment, individual and household
incomes and expenditures in 2020. In this
100
bulletin, we try to take a longer-term view
of sector-wise employment in India. We
base this on CMIE’s monthly time-series of 80

employment by industry going back to the

Real Estate &
year 2016. We have focused on 7 sectors, 60
Construction
viz. agriculture, mines, manufacturing, real
estate and construction, financial services, 40 Manufacturing

non-financial services, and public Public Admin

administrative services. These sectors 20 Financial
make up for 99 percent of total Services
employment in the country.

Mines
00

In figures 2 and 3, we look at four sectors: 2016-17 2017-18 2018-19 2019-20 2020-21

agriculture, financial services, non-

financial services, and public
administrative services. Non-financial been on the rise over the last two years but it decreased by 19.2 percent to 7.9

services exclude public administrative with year-on-year (YoY) growth rates of million in 2020-21.

services and defence services. Together, 1.7 percent in 2019-20 and 4.1 percent in

these accounted for 69 percent of total 2020-21.

In figure 4, we look at employment in

employment in 2016-17 and 78 percent in manufacturing, real estate and

2020-21.

121.5 million Indians were employed in construction, and mining sectors. Together
the non-financial services in 2016-17 these sectors accounted for 30 percent of

The agriculture sector employed 145.7 (excluding those in public administrative all employment in 2016-17 which came

million people in 2016-17. This increased services) (Figure 3). This number rose by down to 21 percent in 2020-21.

by 4 percent to 151.8 million in 2020-21. 5.7 percent to reach 128.5 million in

While it constituted 36 percent of all 2020-21. The financial services sector Manufacturing accounts for nearly 17

employment in 2016-17, this rose to 40 employed 5.3 million people in 2016-17 percent of India’s GDP but the sector has

percent in 2020-21, underlining the and this grew by 8.5 percent to 5.8 million seen employment decline sharply in the

sector’s importance for the Indian in 2020-21. Public administrative services last 5 years.

economy. Employment in agriculture has employed 9.8 million people in 2016-17

06
Figure 2: Agricultural employment
From employing 51 million Indians in

(All figures in millions) 2016-17, employment in the sector

Linear
declined by 46 percent to 27.3 million in

2020-21. This indicates the severity of the

151.8
employment crisis in India predating the

pandemic.

150

On a year-on-year basis, manufacturing

employed 32 percent fewer people in

145.9
145.7
2020-21 over 2019-20. It had seen a

145 growth of 1 percent (YoY) in 2019-20.

143.8
143.4
This has happened despite the Indian

government’s push to improve

manufacturing in the country with the

‘Make in India’ project. Under the project,

140
India sought to create an additional 100

million manufacturing jobs in India by

2022 and to increase manufacturing’s

contribution to GDP to 20 percent by 2025.

135
Instead of increasing employment in the
2016-17 2017-18 2018-19 2019-20 2020-21
sector, we have seen a sharp decline.

Looking closely at sub-sectors within

manufacturing, we find a secular decline in

employment across all sub-sectors, except

Figure 3: Service sector employment chemical industries. All sub-sectors

registered a longer-term decline.

(All figures in millions)

Real estate and construction has also seen a

150 sharp dip in employment over the five-year

139.8
137.8
134.6
period from 2016-17 to 2020-21. From
128.4
121.5 employing 69 million Indians in 2016-17,
.
employment in the sector dipped by 25

percent to 53.7 million in 2020-21. The

100
sector saw employment dip by 12 percent

in 2020-21 (YoY) and 2.1 percent in

2019-20 (YoY). In recent years, the sector

has been beset by issues of inventory pile

50 up, delivery delays and developer failures.

This is reflected in the employment

numbers. The troubled industry has been

9.8 hit further by the coronavirus pandemic in

9.1 8.5 8.1 7.9
5.3 5.0 6.0 5.8 5.8
2020-21.

00

2016-17 2017-18 2018-19 2019-20 2020-21

Mining has also seen employment crash by

38 percent between 2016-17 and 2020-21.

Non-financial Public Adminsitration Financial
From employing 1.4 million people in

2016-17, the sector employed only 0.88

million people in 2020-21. India’s

economic slowdown may be the reason to

blame for the decline in employment in

mining. With demand falling in the steel,

Figure 4: Industry employment
power and construction industries, mining

(All figures in millions) has suffered a hit.

While real estate and construction sector

80
drove employment growth between

2004-11, it saw a sharp decline between

2016-17 and 2020-21. There has been

60
hardly any source of growth in
Real Estate &

employment in this period. This is reflected

Construction

in the 7 percent decline in overall

40
employment in the country from 407

Manufacturing million in 2016-17 to 378 million in

2020-21. These numbers show that the

20
employment crisis in India predates the

pandemic; the Covid-19 pandemic has

Mines
00 made the jobs plight even more severe.

2016-17 2017-18 2018-19 2019-20 2020-21

07
 3 Originally published on:

Sep 24, 2021

by Ankur Bhardwaj

Overall employment declined in the country in 2020-21,

Covid-19 and compared to 2019-20. Young people, women, salaried

employees, small traders and wage laborers suffered

Jobs: The Big
more job losses, and many fell back on farming as an
Setbacks occupation.

Key Insights

Urban India suffers higher job losses Younger people showing signs of Farming only occupation that saw

than rural in 2020-21 vs 2019-2 0


distressed worker effect as their an increase in employment in

numbers of unemployed but actively 2020-21 over 2019-20

W ’
omen s share of workforce goes looking for jobs don t rise as sharpl ’ y

down even further in 2020-2 1

Salaried employees, small traders

Younger people suffer more job and wage labourers decline sharply

losses in percentage terms in in 2020-21 over 2019-20

2020-21 vs 2019-20

Figure 1: Monthly change in rural and urban employment

(All figures in millions) Rural Urban

+40

+20

00

-20

-40

-60

-80
Jan ‘19

Feb ‘19

Mar ‘19

Apr ‘19

May ‘19

Jun ‘19

Jul ‘19

Aug ‘19

Sep ‘19

Oct ‘19

Nov ‘19

Dec ‘19

Jan ‘20

Feb ‘20

Mar ‘20

Apr ‘20

May ‘20

Jun ‘20

Jul ‘20

Aug ‘20

Sep ‘20

Oct ‘20

Nov ‘20

Dec ‘20

Jan ‘21

Feb ‘21

Mar ‘21

Apr ‘21

May ‘21

Jun ‘21

Jul ‘21

This analysis looks at monthly After the sharp drop in the first month of rural India. However, the months of June
employment data from CMIE by sector, the lockdown in April 2020, as the and July 2021 saw a full recovery in
gender, occupation, and age groups (Jan economy unlocked, the next three months employed numbers to bring them back to
2019 - Jul 2021).

saw a recovery in the numbers of pre-April 2021 levels. Comparing average

employed in both rural and urban India.

monthly employment in 2019-20 and

Figure 1 shows the month-on-month (m-o- 2020-21 in rural and urban India, we find
m) changes in employment by rural-urban 2021 saw the more devastating second that rural India employed 5.5 percent fewer
sector. April 2020, saw a sharp decline in wave of Covid-19 but it did not lead to loss people in 2020-21 over the previous year
employment numbers in both rural and of jobs by the same magnitude as the first while urban India employed 8.4 percent
urban India. While more than 40 million wave, most likely because the second wave fewer people.
people lost jobs in urban India, the number was not accompanied by a strict shutdown
in rural India was worse, at more than 73 of economic activity. From April to May
million. The decline in rural India had 2021, 10.10 million people lost jobs in
started in Feb 2020 (pre-pandemic). urban India while 12.58 million lost jobs in
0 8
Figure 2: Monthly change in employment by gender .
(All figures in millions) Female Male

+60

+40

+20

00

-20

-40

-60

-80

-100
Ja

Ma

A r 19
May ‘

Aug 19
S

Oct ‘

Ja

Ma

A r 20
May ‘

Aug 20
S

Oct ‘

Ja

Ma

A r 21
May ‘

J
un 19
ul 19

un 20
ul 20

un 21
ul 21
e 19

e 20

e 21
e 19

e 20
p

p
e 19

e 20
o 19

o 20
n 19

n 20

n 21
b ‘

b ‘

b ‘
p ‘

p ‘
c ‘

c ‘
v ‘

v ‘
‘

‘
r 19

r 20

r 21
‘

‘
‘

‘
‘

‘
‘

‘
19

20
‘

‘
19

20

21
Figure 2 shows us monthly changes in swelled by 23.98 million in June and July jobs in percentage terms and their share in
employment by gender. The figure for thereby making a full recovery. In the the workforce has gone down from 10.66
changes in employment by gender is nearly second wave, women lost 5.42 million jobs percent in 2019-20 to 10.19 percent in
the same as changes in employment by in the April 2021 and 3.6 million in June, 2020-21.
sector. 98.2 million men had lost jobs in while adding 4.21 million in May and 3.55
April 2020 but the next five months (May- million in July. However, just looking at
Sep), saw a full recovery in the number of monthly numbers hides another trend. If
employed men. 15.43 million women lost we compare average monthly employment
jobs in April 2020 but more than recovered for men and women, we find that the year
between May-July by adding 16.57 million 2020-21 saw 10.5 percent fewer women
to their count. As the second wave of the employed compared to 2019-20, while the
pandemic affected the economy in 2021, decline for men was 5.9 percent. Thus,
23.13 million men lost jobs between March while men make up more than 89 percent
and May 2021, but male employment of the workforce, women have lost more

Figure 3: Employment by age group

(All figures in millions)

Age Group Employment 2019-20 and 2020-21 % Change

5.17 Figure 3 shows the changes in average

15-19 yrs 42.4%
2.98 employment by age group between
2019-20 and 2020-21. The year 2020-21
78.94
saw 42.4 percent fewer 15-19-year-olds
20-29 yrs 15.6% employed as compared to 2019-20. 20-29-
66.65 year-olds also saw their average monthly
employment numbers go down by 15.6
92.56 percent while the 30-39-year-olds saw their
30-39 yrs 11.9% numbers go down by 11.9 percent. The
81.57 40-49-year-olds are the biggest group in
the Indian workforce. They saw their
119.31 employment numbers go down by 1.1
40-49 yrs 1.1% percent in 2020-21. Surprisingly, the older
117.97 age group of 50-59-year-olds saw its
employment numbers go up by 2 percent in
87.51 2020-21 over 2019-20. The younger
50-59 yrs 2% workforce suffering more than older age
89.25
groups is in line with our previous analysis
of EPFO data as well.
19.96
60+ yrs 3.6%
19.24

09
Figure 4 takes the findings of Figure 3 Figure 4: Unemployed and actively looking for jobs by age group
further. It looks at the number of those who
are unemployed and actively looking for (All figures in millions)
jobs by age-group. The average number of
those who were unemployed but actively
looking for jobs (UEWL) in India in Age Group Employment 2019-20 and 2020-21 % Change
2019-20 was 33.33 million. It increased by
23 percent to 41.11 million in 2020-21. 4.59
While urban India saw an increase of 15 15-29 yrs 13.59%
percent (12.33 million in 2019-20 to 14.16 3.16
million in 2020-21), rural India saw a jump
of 28 percent (21 million in 2019-20 to 25.79
26.96 million in 2020-21). We see a 20-29 yrs 3.02%
surprising trend here as the percentage 25.01
change in numbers of unemployed actively
looking for jobs is higher among the older 1.73
age groups. While the younger age groups 30-39 yrs 151.9%
suffered more in terms of job losses (in 4.37
percentage terms as seen in Figure 3), it
did not see a commensurate increase in the 0.77
UEWL (Unemployed but actively looking 40-49 yrs 446.13%
4.19
for jobs) numbers. So, while 20-29-year-
olds saw their average employment go
down by 15.6 percent in 2020-21, the 0.34
number of UEWL for 20-29-year-olds did 50-59 yrs 742.33%
2.89
not go up but actually declined by 3
percent. This could be the result of the
0.11
discouraged worker effect. Discouraged 60+ yrs 505.49%
worker effect is defined as, “the decision to 0.68
refrain from job search as a result of poor
chances on the labour market”. In another
surprising trend, old workforce had a
significantly higher percentage of people
who were unemployed and actively
looking for jobs. The 50-59-year-old age
group saw its UEWL numbers swell up by
742 percent in 2020-21 while 60 or more-
year-olds saw their UEWL numbers go up Figure 5: Changes in employment by Occupation
by 505 percent. A possible reason for this (All figures in millions)
could be older members of the workforce
looking for jobs while the young are
unable to find jobs of good quality. Occupation Employment 2019-20 and 2020-21 % Change
However, conclusions ought to be
tempered by the fact that in absolute
number terms 20-29-year-olds make up for Businessmen 78.07
61 percent of all UEWL numbers.

2.9%
75.80
Figure 5 looks at monthly changes in
employment by occupation. As our first Salaried 85.95
CEDA-CMIE Bulletin noted, the biggest Employees 15.61%
72.54
loss was suffered by small traders (or
hawkers) and wage laborers. While
monthly numbers for all categories have Small Traders & 127.75
Wage Labourers 14.50%
been fluctuating since the big decline in 109.23
April 2020, monthly average employment
in 2019-20 and 2020-21 shows a clearer 111.42
picture. 15.6 percent fewer salaried Farmers 7.7%
employees had jobs in 2020-21 as 119.99
compared to 2019-20. 14.5 percent fewer
small traders and wage laborers had 0.26
employment in 2020-21 as compared to Others 57.62%
2019-20. Even businessmen suffered a 0.11
decline of 2.9 percent in employment. 57.6
percent fewer ‘Others’ (who constitute a
very small fraction of the workforce) had
employment in 2020-21 over 2019-20. The
only occupation to see its numbers grow

10
was farming as 7.7 percent more farmers
had employment in 2020-21 as compared
to 2019-20. This is in line with our analysis
of sectoral employment in a CEDA-CMIE
Bulletin that showed that agriculture now
employs more people than it did five years
ago.
in percentage terms than older age groups.
The second wave of Covid-19 in the
country saw fewer job losses as compared
In conclusion, we note that overall
to the first wave despite causing more
infections and deaths possibly because no
strict national lockdown was imposed
during the second wave. CMIE data
reveals that urban India employed 8.4
percent fewer people on average in
2020-21 than it did in 2019-20 while rural
India employed 5.5 percent fewer people in
percentage terms, there isn’t
2020-21 over 2019-20. We see that while
men lost more jobs in 2020-21 over
2019-20 in absolute terms, women lost
more in terms of percentage terms.
Thus, women’s share in the workforce was
reduced from 10.66 percent in 2019-20 to
10.19 percent in 2020-21. A look at
changes in employment by age group
shows that younger workforce (age groups
15-19 and 20-29-year-olds) lost more jobs
followed by small traders and wage
Those above 40 years of age suffered only
a 0.15 percent decline in average
employment in 2020-21 over 2019-20.
CMIE data enables us to examine the age-
wise break-up of those who are
unemployed but actively looking (UEWL)
for jobs and the surprising trend we
discover is that while 15-19-year-olds and
20-29-year-olds suffer higher job losses in
a occupation leading to a rise in its
commensurate increase in their UEWL
numbers. Thus, UEWL numbers for the
older age groups (50 and above) rise very
sharply.
Looking at changes in employment by
occupation tells us that all occupations
except farming saw their average
employment numbers decline in 2020-21
as compared to 2019-20 with the sharpest
fall seen among salaried employees
laborers.
employment has declined in the country in
2020-21, compared to 2019-20, but some
sections have been affected more adversely
than others. Young people, women,
salaried employees, small traders and wage
laborers have suffered more job losses, and
many have fallen back on farming as an
employment numbers.
11
 4 Originally published on:

Jan 14, 2022

by Ankur Bhardwaj

While average monthly employment for men in 2021 was

India’s Shrinking 1.3 percent less than it was in 2019, women’s employment

Female was down by 6.4 percent. Not only were fewer women

employed in India in 2021, even fewer were actively

Workforce
looking for jobs.

Key Insights Quarterly change in employment

Male national average monthly (All figures in millions) Female Male

employment in 2021 was 1.3 percent

less than 2019. Female was 6.4

percent lesser in the same period

Figure 1: Employed

22.1 percent fewer women employed +60

in urban India in 2021 compared to

2019

+40

Fewer women actively looking for +20

jobs in 2021 as compared to both

2019 and 2020. Decline is sharp in

00
both rural and urban India but

sharper in the latter

-20
Average monthly employment

(female) in four states declined by

-40
more than 50 percent in 2021,

compared to 2019 -60

-80
Q1 ’16

Q2 ’16

Q3 ’16

Q4 ’16

Q1 ’1

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’1

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21

Q3 ’21

Q4 ’21
Figure 1 shows quarterly changes in
average employment by gender across
7

India from Q1 (Jan-March) – 2016 to Q4

(Oct-Dec) – 2021.

For example, Q2 – 2020 was the quarter

Figure 2: Unemployed, willing to work, and actively looking for a job (UEWL)
when national lockdown was imposed
across the country owing to the Covid-19
+40
pandemic. As compared to Q1-2021, Q2
had 69.5 million lesser males and 10.3
+30
million less females employed. The
following quarter (Q3-2020) saw 61.1 +20
million increase in average monthly
employment for men and a rise of 8.8 +10
million for women.

00
A similar trend is seen in Q2 and Q3, 2021.
Average monthly employment for men
-10
declined by 12 million in Q2, it increased
-20
by 13.5 million in Q3. The decline in
employment in Q2–2021 can also be -30
attributed to the second wave of the
Covid-19.

-40

Figure 2 shows quarterly changes in

Q1 ’16

Q2 ’16

Q3 ’16

Q4 ’16

Q1 ’1

Q2 ’1

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’1

Q2 ’1

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21

Q3 ’21

Q4 ’21

number of unemployed, willing to work,

and actively looking for a job (UEWL)
7
7

9
9

males and females across India.

12
Figure 3: Average monthly employment 2019-21 (Female)
.

(All figures in millions)

2019 2020 2021

0 - 1.5 1.5 - 3 3 - 4.4 4.4 - 5.9 5.9 - 7.4 7.4 - 8.8 No Data

Figure 4a: Average monthly UEWL 2019-21 (Female)

(All figures in millions)

2019 2020 2021

Figure 4b: Average monthly UEWL 2019-21 (Male)

(All figures in millions)

2019 2020 2021

0 - 0.8 0.8 - 1.7 1.7 - 2.5 2.5 - 3.4 3.4 - 4.2 4.2 - 5.1 No Data

13
While in Figure 1 we saw that Q2 – 2020 monthly female employment in India in growth, rise in unemployment, and fall in
saw a sharp decline in employment 2019 was 43.5 million, which decreased to consumer demand, the pandemic continues
numbers (decline of 69.5 million for men 38.83 million in 2020 and increased to to wreak havoc. CMIE data on
and 10.3 million for women), the number 40.73 million in 2021.

employment helps us understand how it

of men actively looking for jobs swelled by
36.5 million in the same quarter. However,
a similar increase was not observed for
women whose UEWL numbers increased
by only 0.8 million. Thus, while fewer men
and women were employed in Q2–2020,
more men were actively looking for jobs
India’s average monthly female
employment in 2021 is 4.9 percent more
than 2020 but 6.4 percent less than 2019.
Thus, while male employment in 2021 was
only 1.3 percent less than 2019, female
employment continues to be significantly
has affected male and female employment.
We observe that while average monthly
employment for males in 2021 is 1.3
percent less than pre-pandemic year 2019,
women employment is down by 6.4
percent. This decline in female
employment is most severe in urban India.

than women.

lower. Unlike male employment, we see an

urban-rural divide in female employment.

We also find that not only are fewer

Only looking at quarterly changes in
employment numbers for men and women
hides longer-term changes. 2020 saw the
onset of the pandemic, followed by
imposition of nationwide lockdowns and
local movement restrictions. The year 2021
also saw the pandemic affect the economy
even though it did not have national
lockdowns.
Average female employment in urban India
in 2021 is 6.9 percent lower than 2020 and
22.1 percent lower than 2019. In rural India
however, 2021 was 9.2 percent higher than
2020 and only 0.1 percent lower than 2019.
Therefore, we can see that female
employment has suffered a significant
women employed in India in 2021, even
fewer are now actively looking for jobs.
The pandemic has affected the economy,
society, and lives in a profound way. One
of the worst impacts has been borne by the
education sector. In a Picture This post, we
showed how India saw longer periods of
school closure than other countries. The

reversal in urban India since the pandemic.

increase in child-care activities may have

affected women’s participation in the
When we compare average monthly Four states had more than 50 percent labour force.

employment in 2021 with 2019, we decline in average monthly female

observe how it has changed from pre-
Covid to Covid period while comparing
2021 with 2020 can show us how the
employment (and therefore the economy)
has progressed sequentially.
employment in 2021, compared to 2019. In a paper from October 2020, Ashwini
These were Tamil Nadu (-50.9 percent), Deshpande examined the evidence from
Goa (-56 percent), Jammu and Kashmir India on the impact of the pandemic on the
(-61 percent), and Punjab (-57.9 percent). gendered division of paid work

Interestingly, except for Jharkhand, all
The average monthly employment for
males in the country in 2019, 2020, and
2021 was 359.64 million, 340.11 million,
and 355.06 million respectively. Thus in
2021, the average monthly employment
was up by 4.4 percent over the previous
year. But when we compare 2021 with the
pre-pandemic year 2019, we find that
India’s average monthly employment for
(employment) and unpaid work (time spent
eastern Indian states (West Bengal, Odisha,
and Chhattisgarh) registered a significant
increase in female employment in 2021
over 2020. This reversal of female
employment in urban India is also reflected
in the number of women actively looking
for jobs. Figure 4a and 4b show us the
average monthly state-wise UEWL
numbers for women and men respectively
in the years 2019, 2020, and 2021.
on domestic work) and incomes. “An
important dimension that negatively affects
women’s labour force participation is their
predominant responsibility to get
housework and domestic chores done,”
said the author. Whether the recent decline
is also attributable to this or is driven by
demand side factors, deserves a deeper
analysis.

males has declined by 1.3 percent.

CMIE data shows that urban India had 22.1

Among larger states, the highest increase in
male employment in 2021 (over 2020) is
seen in Jharkhand at 12.3 percent. In fact,
Jharkhand’s average monthly employment
in 2021 is 4.3 percent higher than even
2019. Similarly, Gujarat in 2021 was up
10.2 percent over 2020, and up 4.4 percent
over 2019. However, in Tamil Nadu and
percent fewer women employed in 2021 as
compared to 2019. UEWL data shows that
fewer women were actively looking for
jobs in 2021. While 9.52 million women
actively searched for jobs every month in
2019, this declined to 8.32 million in 2020
and to 6.52 million in 2021. This trend was
observed in both urban and rural India.

NCT of Delhi, the average monthly male

employment in 2021 is still significantly
lower than 2019. Tamil Nadu (-11.2
percent), Delhi (-12.5 percent), Kerala
(-8.6 percent), Haryana (-5.4percent), and
Andhra Pradesh (-5 percent) had fewer
males employed in 2021 than 2019.
In urban India, only 2.57 million women
actively searched for jobs every month in
2021 as compared to 3.87 million in 2019
(33.7 percent decline). In rural India, only
3.95 million women actively looked for

jobs in 2021 as compared to 5.16 million in

2020 and 2021 (23.5 percent less).

We do not observe a significant difference

in these patterns across urban and rural
areas. For urban India, average male
monthly employment in 2021 was 5.3
percent more than 2020 but 1.9 percent less
than 2019. For rural India, 2021 was 4
percent more than 2020 but 1 percent less
than 2019.
Thus, we can say that since the onset of the
pandemic, not only are fewer women
employed in India, but even fewer are
looking for jobs. We don’t observe this
trend in the male workforce. The number
of men actively looking for jobs in 2021 is

up 19.7 percent in urban India and 14.9

Figure 3 shows us state-wise average
monthly employment for women in the
years 2019, 2020, and 2021. The average
percent in rural India (compared to 2019).
The devastating effect of the pandemic on
the Indian economy is now widely
acknowledged. From a sharp drop in GDP
14
 5 Originally published on:

Feb 28, 2022

by Ankur Bhardwaj

The huge reduction in employment due to the pandemic

The Challenge of masks a long-term decline in employment for younger

Youth workers. A 30 percent decline in employment for young

workers over five years shows economic weakness and

Unemployment
portends social pain.

Key Insights Quarterly changes in India’s labour force

(All figures in millions) UEWL Employed
’
India s youth(aged 15 to 29),
employed numbers in Oct-Dec 2021

were 13 percent lower than the Figure 1a: Total Labour Force (15 years and above)
same quarter in 2019 (pre-
450
pandemic), and 30 percent lower

compared to the Jan-Mar 2016 400

quarter

350

The share of 50-59-year-old workers 300

has increased from 16 percent in
2016 to 24.6 percent in 2021

200
This has not led to a commensurate

increase in the numbers of those

‘unemployed but willing to work and 100

actively looking for jobs’ (UEWL) in

the same period

00
Q1 ’16
Q2 ’16
Q3 ’16
Q4 ’16
Q1 ’17
Q2 ’17
Q3 ’17
Q4 ’17
Q1 ’18
Q2 ’18
Q3 ’18
Q4 ’18
Q1 ’19
Q2 ’19
Q3 ’19
Q4 ’19
Q1 ’20
Q2 ’20
Q3 ’20
Q4 ’20
Q1 ’21
Q2 ’21
Q3 ’21
Q4 ’21
15-29-year-olds made up 25.6
percent of all employed workers in

2016, which declined to 21 percent in

2019. In 2021, this number decreased Figure 1b: Youth Labour Force (15-29 years)
to just 18.2 percent
140

120

We consider labour force as a sum of those 100

employed and those unemployed, willing
to work, and actively looking for a job 80
(UEWL). Figure 1a reveals quarterly
changes in India’s labour force for all 60
workers between January 2016 and
December 2021. For example, the total 40
number of persons employed in Q1-2019
was 403.6 million with 30 million UEWL, 20
making it a 433.6 million strong labour
force. India’s labour force is still 00
Q1 ’16
Q2 ’16
Q3 ’16
Q4 ’16
Q1 ’17
Q2 ’17
Q3 ’17
Q4 ’17
Q1 ’18
Q2 ’18
Q3 ’18
Q4 ’18
Q1 ’19
Q2 ’19
Q3 ’19
Q4 ’19
Q1 ’20
Q2 ’20
Q3 ’20
Q4 ’20
Q1 ’21
Q2 ’21
Q3 ’21
Q4 ’21

marginally lower than what it was in

March 2020 (when Covid-19 lockdowns
were imposed). The share of employed (as
part of the labour force) has remained
around 92-93 percent since Q1-2019,
except in Q2-2020 when it declined to 82 Figure 1b shows the size of the youth time workers to secure entry into the job
percent. This was the quarter when labour force (those in the 15-29-years age market. Figure 1b shows that while 103.8
economic activity came to an almost group who are in the labour force) between million youth were employed in Q1-2016,
complete halt due to Covid-19 lockdowns Q1-2016 (Jan-Mar) and Q4-2021 (Oct- this number decreased by 30 percent to
across the country.

Dec). This age group represents new 72.7 million in Q4-2021. The total size of
entrants to the labour force, and the state of the 15-29-year-old labour force in Q1-2016
Figure 1a shows changes in the size of employment amongst this cohort represents was 134.1 million; by Q4-2021, this had
India’s total labour force in this period, and how easy or difficult it is for young, first-
15
Figure 2a: Average monthly youth employment 2019-21
(All figures in millions)
2019
0 - 2.4 2.4 - 4.8
declined by 22 percent to 104.3 million.
This shows that while 30 percent fewer
pandemic year 2019, this marks a decline
15-29-year-olds were employed in 2021 (as
compared to 2016), many did not add to
UEWL numbers. It is possible that they
searched for a job for a few months, and
then opted to exit after not getting a job.
This points to long-term unemployment. If
we compare pre- and post-pandemic
periods, we can find that the number of
youth employed in Q4-2021 was 13
percent lower than Q4-2019. This sharp
decline in employment (and labour force)
of 15-29-year-olds has been a steady
phenomenon since 2016. The Covid-19
Figure 2b: Average monthly youth UEWL 2019-21
(All figures in millions)
2019
0-1 1 - 2.1
4.8 - 7.2 7.2 - 9.7 9.7 - 12.1 12.1 - 14.5
pandemic has only exacerbated a pre-
existing decline.
In Figure 2a we look at average monthly
youth employment across 27 Indian states
or Union Territories in 2019 and 2021. In
2019, at the national level, the average
monthly employment levels of those aged
15-29 was around 84.9 million. This fell by
15 percent to 71.8 million in 2020, the year
the Covid-19 pandemic struck. There was a
slight recovery in employment numbers to
72.6 million in the year 2021. On a year-
on-year basis, this represented an increase
of 1 percent.
2.1 - 3.1 3.1 - 4.1 4.1 - 5.2
.
2021
No Data
However, if we compare this to the pre-
of 14.5 percent. Lower employment in
2021 than the pre-pandemic period
pointsto sluggish economic activity that
provides fewer opportunities for young
workers.
Between 2019 and 2020, the highest fall in
employment for 15-29-year-olds was seen
in Delhi with a decline of 38 percent
(reducing from 1.6 million in 2019 to 1
million in 2020). Delhi was followed by
J&K (37 percent decline) and Haryana (35
percent decline).
2021
5.2 - 6.2 No Data
16
 .
Figure 3: Employed Workers in India by Age Group from 2016-21.

(All figures in millions)

15-29 30-49 50-59 60+

450

400

350

300

250

200

150

100

50

00
2016

2017

2018

2019

2020

2021
On comparing 2021 with the pre-pandemic However, the reality is more complex. and, Goa increased by 11 percent.

year 2019, we see the sharpest decline in Average monthly employment in India for

employment for 15-29-year-olds in 15-29-year-olds in 2020 was 13.1 million Figure 3 shows us the changing age-wise

Uttarakhand (43 percent) followed by Goa lower than 2019, but the increase in those composition of India’s employed workers

with a 42 percent decline. In Delhi, the actively looking for jobs was only 0.55 between 2016 and 2021. In 2016, 15-29-

2021 numbers are still 39 percent lower million. Thus, over 12.5 million 15-29- year-olds were 104 million out of a total of

than 2019 and in Haryana they are 40 year-olds not only lost employment, but 406.6 million employed workers, making

percent lower.

they also stopped looking for new jobs.

them 25.6 percent of India’s total

employed workers in that year. Since then,

Looking at states going to polls in The causes for this reduction deserves their share of the employed has been

February and March 2022, Uttar Pradesh greater study. This might represent young declining, as shown in Figure 3b. Their

average monthly employment for 15-29- workers entering education to boost their numbers declined to 84.9 million in 2019

year-olds in 2021 was 17 percent lower future prospects. However, given the fact out of a total 404 million employed

than 2019. Uttarakhand was 43 percent that many women have withdrawn from workers, making them 21 percent of

lower, Punjab 15 percent lower and Goa 42 the labour force (as pointed out in a India’s total employed workers. In 2021,

percent lower.

previous bulletin), this might represent a 30-49-year-olds made up 53 percent of

gendered response to job loss, with young India’s employed workers, but the share of

In Figure 2b we look at average monthly women not participating in the labour force 15-29-year-olds had declined to 18 percent.

UEWL numbers across 27 Indian states due to reduced employment prospects. This While in absolute terms, the number of

and UTs for the young in 2019 and 2021. might also be because of increase in 15-29-year-old employed workers has

Across India, 29.6 million 15-29-year-olds domestic responsibilities owing to school declined between 2016 and 2021, the

were willing to work and actively looking closures. As pointed out in a previous opposite is true for 50-59-year-olds. The

for jobs every month in 2019. This Picture This post, school closures take a average monthly numbers of those aged

increased to 30.1 million in 2020 when the disproportionate toll on women’s work and 50-59 in the workforce increased from 65.1

pandemic struck, yet declined to 29.7 prevent them from joining paid work.

million in 2016 to 97.9 million in 2021.

million in 2021, a 1 percent decline when Their share among the employed has

compared to the pre-pandemic period. The Among large states, the sharpest decline increased from 16 percent in 2016 to 25

average size of the labour force of 15-29- (from 2019 to 2021) in the 15-29-year-old percent in 2021. This might be due to

year-olds in 2019 was 114.5 million, labour force was seen in Himachal Pradesh significant income hardships being faced

falling to 101.9 million in 2020 before at 32 percent. Delhi saw its young labour by households, necessitating a return to the

rising slightly to 102.3 million in 2021, a force decline by 33 percent. In states going workforce by older workers.

11 percent decline when compared to 2019. to polls, UP youth labour force declined by

On the face of it, declining unemployment 28 percent, Uttarakhand declined by 29

numbers signal a healthy recovery. percent, Punjab declined by 19 percent

17
The demand for steady, secure jobs is may have absorbed this labour force but represents reduced income prospects for

apparent in various agitations erupting in we have demonstrated earlier that those still seeking entry into gainful

different parts of the country: be it is the manufacturing employment has shrunk in employment but also for its ill effects on

demand for being included in the OBC list, this period and only exacerbated the stress. social stability.

or protests in Bihar and UP related to Long-term unemployment may also lead to

recruitment exams, or rise in suicides due a loss of skills thereby making it harder to Policy must tackle the problem

to unemployment, this social pain is return to the workforce. The problem of immediately to prevent the scars of the

starting to become visible across the low employment generation for the youth pandemic becoming permanent for the

country. A growing manufacturing industry is a serious issue, not just because it younger generation.

18
 6 Originally published on

Apr 07, 2022

by Ankur Bhardwaj

Between 2016 and 2021, farm employment increased

Shifts in even as salaried employment declined. This trend

underlines the weakness of India’s economy which has

Occupational
not been able to provide employment outside its small-
Trends sized farms.

Key Insights

Nationally, number of people Small traders and wage labourers 9 percent increase in farming

employed in farming has steadily made up 43 percent of all employed employment in 2021 over 2019

increased, from 91 million in 2016 to people in 2016. This proportion has across the country. Sharpest

120 million 2021

declined to 31 percent in 2021

increase seen in Jharkhand

Number of people employed as Between 2019 and 2021, the number

small traders or daily wage of people in salaried jobs has

labourers has declined from 173.3 declined from 87.4 million to 78.3

million in 2016 to 124.5 million in million. Sharpest decline seen in

2021 Rajasthan

:
Table 1 Average monthly employment by occupation

(All figures in millions)

Occupation 2016 2017 2018 2019 2020 2021 Percentage change 2016-21

&
Small Traders
%
173.3 161.0 142.8 129.5 109.4 124.5 -28.2
Wage Labourers

Salaried 88.1 86.6 88.1 87.4 74.2 78.3 -11.1 %

Business 53.0 60.0 68.1 76.4 77.6 74.7 +40.9%

Farmers 91.1 99.1 102.6 110.4 119.4 120.3 +32.1%

Total Employed 406.6 407.2 402.3 404.0 380.7 397.9 -2.1 %

Table 1 shows us the average monthly between 2016 to 2021. The category Absolute numbers do not reveal the full
employment by occupation in a “Small Traders & Wage Labourers” also picture of changes in employment by
calendar year. We can see that the total includes farm labourers (different from occupation. Figure 1 shows us the
number of employed people in 2021 farmers). CMIE data for 2019, 2020, and percentage break-up of employment by
was 7
39 .9 million which was 4.5 2021 shows average number of farm occupation between 2016 and 2021. We
percent higher than 2020 but still 1.5 labourers at 36.1 million, 30.3 million, and can see that small traders and wage
percent lower than 2019. From 2016 to 36.3 million respectively. Thus, we don’t k
labourers ma e up the biggest share of all
2021, the biggest decline is seen among see a sharp increase in farm labourers in employed people, but their share has
small traders and wage labourers whose 2020 (the pandemic year) even though the declined from 42.6 percent in 2016 to 31. 4
average monthly employed numbers number of farmers has shown a steady percent in 2021. The percentage of farmers
declined by 2 . 85 percent in this period. increase. On the other hand, the number of has increased from 22. 5 percent in 2016 to
The number of people employed in people employed in farming has steadily 30.2 percent in 2021. Similarly, the
small trade or as wage labourers in increased year-on-year from 2016-21. percentage of those employed in business
2021 is still lower than the pre- Number employed in farming grew by 32.2 has increased from 13 percent in 2016 to
pandemic year 2019. Even the number percent in this period. 8 8 percent in 2021.
1 .
of salaried have declined by 11 percent
19
Figure 2 shows us the average number of Figure 1: Percentage break-up of employment by occupation
people employed in salaried jobs every
month of 2019 and 2021 across states. For (All figures in millions)
India, average monthly salaried
employment was 87.4 million in 2019
which declined to 74.2 million in 2020 Farmers
22% 24% 26% 28% 31% 30%
before increasing to 78.3 million in 2021.
The average monthly employment in 2021
was thus 6 percent higher than 2020 but 10
percent lower than 2019.

43% 40% 35% 32% 29% 31% Small Traders & Wage Labourers
Among large Indian states, the sharpest
decline in 2020 (over 2019) was seen in
Rajasthan at 31 percent while states like
Haryana, J&K, Tamil Nadu, Maharashtra, 22% 21% 22% 22% 19% 20% Salaried
MP, and others saw a decline of 20 percent
or more. If we compare 2021 with 2019,
we find that Rajasthan saw the biggest 13% 15% 17% 19% 20% 19% Business
decline at 31 percent followed by J&K at
30 percent.
2016 2017 2018 2019 2020 2021

Figure 2: Number of salaried employees 2019-21.

(All figures in millions)

2019 2021

0 - 3.94 3.94 - 7.88 7.88 - 11.82 11.82 - 15.76 15.76 - 19.7 19.7 - 23.64 No Data

Figure 3 shows us the average number increase in 2021 over 2019 (1.7 million to Nationally, the number of salaried
of people employed in farming every 2.5 million). Maharashtra saw an increase employees, small traders & wage labourers
month in 2019 and 2021 across Indian of 30 percent in 2020 over 2019 and an have decreased in numbers over the last
states. As shown in Figure 1, farming increase of 21 percent in 2021 over 2019.

few years, while the number of farmers has

has seen employment increase between increased.

2016 and 2021. It employed 110
million people in 2019 which increased
to 120 million in 2021, a growth of 9
percent. Among larger Indian states, the
biggest increase in farming
employment was seen in Jharkhand
which saw a 33 percent increase in
The last two CEDA-CMIE bulletins
highlighted two major issues. One, of
women exiting the workforce and second,
of the sharp increase in India’s youth
unemployment. The third bulletin in this
series shows us how the sectoral mix of
India’s employment is changing.
The more than 30 percent increase in farm
employment between 2016 and 2021
coupled with the decline in salaried
employment in the same period underlines
the weakness of India’s economy which

has not been able to provide employment

2020 over 2019 (1.7 million to 2.2 outside its small sized farms.
million) and a 53 percent 20
Figure 3: Number of farmers 2019-21.
(All figures in millions)

2019 2021

0 - 3.94 3.94 - 7.88 7.88 - 11.82 11.82 - 15.76 15.76 - 19.7 19.7 - 23.64 No Data

These three CEDA-CMIE bulletins paint a

grim picture of India’s employment
situation and reveal the difficult position
for policy makers.

21
 The Long Road to Recovery
by Preetha Joseph and Raashika Moudgill

Key Insights

Employment, hit hard during the Women and younger individuals Changes in overall employment
initial months of the Covid-19 (15-39 years old) have been hit following the first Covid-19
pandemic, is yet to return to pre- harder by unemployment in the past lockdown seem to be primarily
pandemic levels

three years

driven by fluctuations in rural

employment during this time
Compared to January 2020, around In a return to pre-pandemic trends,
14 million fewer individuals were the services sector now employs the
employed in October 2022 largest share of India’s workforce

After being hit hard during the initial Figure 1: Number of employed persons aged 15 and above
months of the Covid-19 pandemic,
employment levels are recovering but are (All figures in millions)
yet to return to pre-pandemic levels, as
Figure 1 shows. Compared to January
2020, around 14 million fewer individuals 400
- 4.5 million fewer men and 9.6 million
fewer women - were employed in October 380
2022.

Women in India were less likely to be part 360

of the formal workforce than men even
before the pandemic, but as our bulletin on 340
this subject noted, they lost employment in
greater proportions when the lockdowns 320
were imposed to check the spread of
Covid-19. The months corresponding to
the second wave of the Covid-19 pandemic 300
- April and May 2021 - also witnessed a
significant fall in employment. The impact 280
at this time was predominantly in male
employment, with 21 million fewer males
Q1 20

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22
employed in April and May 2021 than in
March 2021.

Figure 2 shows the number of people Figure 2: Number of employed by age group
employed by age group. The younger
population has been hit more compared to (All figures in millions)
older adults. As of October 2022, about 20
percent fewer people in the age group of 220
15-39 were employed as compared to
before the pandemic in January 2020. 200
However, among older age groups (40-59),
the number of people employed has seen 160
an increase - an additional 25 million
individuals in this age group were
employed in October 2022, as compared to 120
January 2020.

80
Urban employment in the past 3 years has
remained relatively stable following the
initial months of stringent lockdowns. 40
Changes in overall employment following
the first Covid-19 lockdown seem to be
primarily driven by fluctuations in rural 00
employment during this time.
Q1 20

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22

15-39 40-59 60+

22
A lot of the fluctuation can be attributed to Figure 3: Number of employed by sector (All India)
seasonal changes in employment in
agriculture, such as the sharp increase seen (All figures in millions)
in July 2021, during the Kharif sowing
season. Compared to January 2020, 0.4
million more individuals are employed in
160
urban India and rural India employs 14
million fewer individuals as of October
2022.

120
Figure 3 shows sector-wise employment
trends in 2022. These trends also offer
further insight into recent variation in rural
employment, as seen in Figure 4.

80

The agriculture sector recovered and

continued to employ a rising number of
40
individuals since the first Covid-19
lockdown. The Economic Survey also finds
that agriculture and the allied sector
remained the most resilient sector during 00
the pandemic, with a growth of 3.6 percent
Q1 20

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22
in 2020-21 and 3.9 percent in 2021-22.
However, the rise in agricultural
employment has slowed down in the past
year. There was a 4 percent increase in Services Agriculture Industry

employment in agriculture from 2019-2020

to 2020-2021. This was followed by a
smaller 2.6 percent rise in 2021-2022.

Decrease in rural employment in June

Figure 4: Number of employed by sector (Rural India)
2022, for example, was driven by a fall in
agricultural employment. This coincided
(All figures in millions)
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 160

to be due to a decrease in manufacturing

and service sectors, while employment in

agriculture rose by over 5 million.

120

Figure 5 shows the average employment in

different segments of the industrial sector.
Overall, employment in the real estate and 80
construction sector seems to have returned
to pre-pandemic levels in 2022.
Employment in manufacturing has shown
40
slow and only partial recovery. Around 6
million fewer individuals are employed in
this sector as of October 2022, compared to
average employment in the sector in the
00
years 2018 and 2019.

Q1 20

Q2 20

Q3 20

Q4 20

Q1 21

Q2 21

Q3 21

Q4 21

Q1 22

Q2 22

Q3 22

Q4 22

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 Services Agriculture Industry
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 59
million in FY 2018-19.

23
Financial services sector too has seen an
Figure 5: Average employment in industry, by segment
uptick in the number of people employed

over the years. In FY 2021-22, the number (All figures in millions. Data for 2022 is from Jan-Oct)

of people employed in the sector grew by

16.1 percent as compared to the previous

Real estate Manufacturing Mining
year. The workforce of the Information

Technology and Information Technology

enabled Services (IT and ITeS) sector also 104.7

102.1 102.6
grew by 11 percent between FY 2020-21

and FY 2021-22.

100

94

Hotels and tourism, a big employer within

services, has not seen similar growth and is

still to reach pre-pandemic levels of the 83

workforce. Within the sector, more than

80
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

60
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 40

than the pre-pandemic period, at around 27

percent of employed workers, as compared

to 42 percent in 2016 and 32 percent in

2019.

20
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 00

2018. The number of individuals employed 2018 2019 2020 2021 2022

as salaried workers and small traders/wage

labourers were on the decline prior to the

pandemic and have not recovered to

previous levels as of 2022.

24
 Covid-19 Pandemic:
Impact on Earnings,
Expenditure and Savings

25
 1 Originally published on:

Feb 24, 2021

by Ankur Bhardwaj

Household incomes in rural and urban India were on a

Lockdown’s declining trend even before the pandemic but the

steepest decline came in the month of April 2020 (the first

Impact on Income
full month of lockdown) with a decline of 19 percent and
and Wages 41 percent in rural and urban India respectively.

Key Insights
Figure 1: Average household income ( Rs/month)
Household incomes in India were

declining even before the pandemic

but the steepest decline came in the 25,000

month of April 2020 (the first full

month of lockdown) with a decline 20,000

of 19 percent (rural) and 41 percent

(urban )

15,000

Despite improvement since May 10,000

2020, individual wage incomes

continue to be depressed compared 5,000

-
to pre pandemic levels, as of

September 2020

0
Apr 19
May 19
Jun 19
Jul 19
Aug 19
Sep 19
Oct 19
Nov 19
Dec 19
Jan 20
Feb 20
Mar 20
Apr 20
May 20
Jun 20
Jul 20
Aug 20
Sep 20
Total household income (urban) and
individual wage income (rural and

urban) in April 2020, were less than Rural Urban

half of April 2019 figures. Total
household income (rural) was down

34 percent in the same month

by
Figure 2: Average wage income ( Rs/month)

Earlier this month, CMIE released the 5,000

monthly household income and individual
wage income for the month of September
4,000
2020. India entered the first complete
lockdown from March 25, 2020. As all
economic activity came to a complete halt,
3,000
the first half of FY2020-21 bore the brunt
of the pandemic. In the first CEDA-CMIE 2,000
Bulletin (January 2021), we tried to
understand the impact the pandemic had on 1,000
employment. With this data release from
CMIE’s Consumer Pyramids Household 0
Survey, we can try and understand the
Apr 19
May 19
Jun 19
Jul 19
Aug 19
Sep 19
Oct 19
Nov 19
Dec 19
Jan 20
Feb 20
Mar 20
Apr 20
May 20
Jun 20
Jul 20
Aug 20
Sep 20

impact Covid-19 pandemic and the

lockdown had on household incomes and
individual wages.

Rural Urban
In this bulletin, we look at changes in
monthly household income and individual total household incomes in rural and urban March 2020 levels.

wages in the pre-pandemic and pandemic India were on a declining trend even before
periods. We also compare the changes in the pandemic and lockdown hit but the Figure 2 captures the m-o-m change in
H1FY21 with H1FY20. We look at a rural- steepest decline came in the month of April total wage income in rural and urban India
urban split and see if it offers more 2020 (the first full month of lockdown) between April 2019 to September 2020.
insights. Figure 1 shows the month-on- with a decline of 19 percent and 41 percent While this also shows the same broad trend
month change in total household income in rural and urban India respectively. as seen with total household income, we
(Rs/month) in rural and urban India over an Despite some improvement in household find that rural wage income declined nearly
18-month period from April 2019 to incomes in the subsequent months till as sharply (by 41 percent) as urban wage
September 2020. Starting November 2019, September 2020, they were still lower than
2 6
Figure 3: Percentage Change in household and wage incomes, 2020 vs 2019

Rural Household Urban Household Rural Wage Urban Wage

Income Income Income Income

April May Jun Jul Aug Sep

0%

-10%

-20%

-30%

-40%

-50%

income (by 44 percent) in the month of figures in rural and urban India in H1FY .data related to employment till December

April 2020. Despite improvement since 2020-21 vs H1FY 2019-20. Total 2020, as analysed in the CEDA-CMIE

May 2020, individual wage incomes household income (urban) and individual Bulletin for January 2021. According to

continue to be depressed vis-à-vis pre- wage income (rural and urban) in April that data, we saw that while employment

pandemic levels.

2020, were less than half of April 2019 recovery had been steady till September

figures. Total household income (rural) was 2020, it started to falter from October 2020

Figure 3 shows the percentage change in down by 34 percent in the same month. onwards. It can be assumed that income

total household income and individual The chart shows that this decline was recovery may have faltered between

wage income (in both rural and urban weaker in subsequent months, till October-December 2020 as well.

India) in the months of April to September September 2020 but had not recovered yet.

2020 over April to September 2019. This We have income data from CMIE’s CPHS

shows the severity of decline in both only till September 2020, but we do have

27
 2 Originally published on:

Mar 25, 2021

by Ankur Bhardwaj

Household monthly expenditure had been on a decline

The Brunt Borne before the pandemic hit, but the biggest crash came in

April 2020 when rural household expenditure dropped by

by Household
27 percent as compared to March, while urban
Expenditure expenditure saw a drop of 35 percent.

Key Insights
Already declining household In urban India, monthly household In rural India, monthly household

expenses su ffered the biggest blow income and expenses declined by 52 expenses and income reduced by 42
in April 2020, the first full month of percent and 46 percent respectively percent and 3 4 percent respectively
nationwide Covid-19 lockdown

in April 2020 as compared to April in April 2020 as compared to April

2019 2019

Every month from April to

September 2020 saw a decline in
income and expenses over the same

period in the previous financial year

Data analyzed in the CEDA-CMIE Figure 1: Change in household expenses in urban and rural
Bulletin 2, revealed the extent of damage
India
the Covid-19 pandemic and the nationwide
lockdown did to both household and (Month-on-month change)
individual wage incomes between April
and September, 2020. This followed the
16000
first CEDA-CMIE Bulletin in which we
looked at the impact the pandemic had on
14000
employment in the year 2020.

12000
In this Bulletin we take a look at the
impact of the pandemic and lockdown on
household expenses in rural and urban 10000

India in the same period. Figure 1 shows

the month-on-month (m-o-m) change in 8000
total monthly household income (Rs/
month) in rural and urban India over a 19-
6000
month period from April 2019 to October
2020. CMIE data reveals that monthly
4000
household expenses in rural India had been
on a declining trend since November 2019
2000
but they suffered the biggest crash in April
2020 with a decline of 27 percent over
March 2020.

00
Apr 19

May 19

Jun 19

Jul 19

Aug 19

Sep 19

Apr 20

May 20

Jun 20

Jul 20

Aug 20

Sep 20

Oct 20
Oct 19

Nov 19

Dec 19

Jan 20

Feb 20

Mar 20

In rural India, the household expenses

started increasing from the month of May
2020 but had not yet reached pre-pandemic
levels by October 2020. In urban India,
monthly household expenses were on a Rural Urban

declining trend since February 2020 but

crashed by 35 percent in April 2020 before
starting to rise for the rest of the year.
Urban monthly household expenses had
also not recovered to pre-pandemic levels
by October 2020. Thus, we find that
already declining household expenses
suffered the biggest blow in April 2020, the
first full month of nationwide Covid-19
lockdown.
2 8
Figure 2: Percentage Change in household income and expenses, 2020 vs 2019

Rural Income Urban Income Rural Expense Urban Expense

April May Jun Jul Aug Sep

0%

-10%

-20%

-30%

-40%

-50%

Figure 2 shows the percentage change in declined by 52 percent in April 2020 over .As we have pointed out in our previous

total household expenses and income (both April 2019, the monthly household bulletins, employment data shows that it

rural and urban India) in the months of expenses in urban India declined by 46 had started faltering from October 2020

April to September 2020 over April to percent. The blow was relatively softer but onwards. That portends that both income

September 2021. This helps juxtapose the still severe in rural India with a decline of and expenses in subsequent months of

change in both household income and 34 percent (income) and 42 percent calendar year 2020 would have continued

expenses in a pandemic year and a non- (expenses). We find that every month from on the same trend.

pandemic year. The first month of the April to September saw a decline over the

nationwide lockdown, April, sees the same period in the previous financial year.

sharpest decline in all figures. While

monthly household income in urban India

29
 3 Originally published on:
Jul 01, 2021
by Ankur Bhardwaj and Ashwini Deshpande

Household savings that get channelled into real estate or

business can provide a boost to economic activity and
Shifts in Savings help the economy to recover. But if people are hesitant to
Preferences - I lock their money for longer periods, that makes the
prospects of future recovery that much weaker.

Key Insights
The downward trend in household The intention to save in gold hit a Investment in businesses doesn’t
intention to save started before the peak in July-September 2018 for all exhibit the trends that other saving
Covid-19 pandemic, but has income groups combined

instruments show. Except for a

worsened with the pandemic. Since
October-December 2019, there has
been a broad decline in intention to
save in gold, business, and real
estate
Real estate hit the peak interest in
October-December 2018 with 6.62
percent respondents across income
groups expressing an intention to
save in this instrument

minor dip in July-September 2020,
there has been an increase in the
popularity of business as a savings
instrument since January-March
2017

How has the Covid-19 pandemic affected our earlier bulletins, we take a longer look 2017 and so on).

personal (household) savings? There is a at how intention to save has changed from
trade-off between current liquidity and January 2017 to April 2021, instead of When we look at data for these three
locking money away in assets. We need zooming in narrowly around the pandemic.

categories, we observe a broad decline in

liquidity to take care of immediate intention to save in these instruments since
financial needs. We also save (invest) in CMIE provides us the percentage of October-December 2019. In Figure 1, we
financial or other assets as protection surveyed households who intend to save in take a closer look at gold across various
against future shocks or for longer term a particular instrument (or avenue) for income groups.

gains, e.g. invest in gold, real estate or in a
fixed deposit or mutual fund. Savings are
higher when people feel financially secure
in the present. When incomes take a hit, for
instance, as a result of job losses due to the
pandemic, people can run down their
example gold or real estate or fixed
deposits, in the next 120 days from the date
of survey. The CMIE data provides these
percentages for all households as well as
broken down by slabs of annual household
incomes.
Figure 1 depicts the intention to save in
gold over the next 120 days for all income
groups and all quarters starting from Jan-
Mar 2017. It also shows us the average

quarterly prices for gold in this period. The

savings.

intention to save in gold hit a peak in July-

According to RBI, India had a household
financial savings rate of 10.4 percent in the
July-September 2020 quarter. This was a
sharp decline from 21 percent in the
previous quarter (April to June). The
This helps us understand how intention to
save in specific instruments varies by the
income profile of savers. For example, in
the July-September 2020 quarter, 1.4
percent respondents expressed an intention
to invest in gold in the next 120 days. But
September 2018 (for all income groups
combined). We see a consistent decline in
gold’s popularity amongst savers since
December 2019. The highest intention to
save in gold is seen in the top income
bracket.

savings rate declined further to 8.2 percent
in the October-December 2020 quarter.
RBI figures show that the Covid-19
pandemic has led to a decline in financial
assets such as bank deposits, pension
money, life insurance funds and currency
if we take a look at income groups, we find
that among the households with an annual
income of more than INR 1 million per
annum, this number rises to 3.06 percent.
This is expected as richer households are
more likely to save in gold (i.e. buy gold).
It is important to note that high net worth
individuals are under-represented in all
household surveys, everywhere in the
world. This is because it is very difficult, if

not impossible, to get the super-rich to

holdings.

answer survey questions. The CMIE data

CMIE data collects information about 13 has some representation from households
In this CEDA-CMIE bulletin, we focus on savings avenues. In this bulletin we will earning more than INR 1 million per
intention to save. Intention to save is focus on three of those, namely: gold, annum, which gives a glimpse into their
different from actual savings as it reflects business, and real estate. In the next savings intentions.

people’s mood or sentiment about the CEDA-CMIE bulletin, we will focus on

immediate future. Intentions might not
match actual actions. However, intention to
save is a good barometer of economic
anxiety: when intention to save (or actual
savings) take a hit, it indicates that people
are unwilling to lock away liquidity despite
the advantage of future use or gain. Like
the intention to save in fixed deposits, life
insurance, post office savings, provident
fund, mutual funds, listed shares, NSC, and
Krishi Vikas Patra. Since the CMIE data is
nationally representative on a quarterly
basis, we look at year on year changes at a
quarterly level (from January to March
30
 In Figure 2, we plot the intention to invest
Figure 1: Intention to save in gold by income group
in real estate by income groups. We see a
(Intention to save in next 120 days in percent) decline in intention to save in real estate
45.6k among all income groups since April-June

2019. For all income groups combined,

Avg. Gold Price real estate hit the peak interest in October-

December 2018 with 6.62 percent

36.8k
respondents expressing an intention to save

in it over the next 120 days. Through most

of the period for which we analyzed the

27.3k
26.2k 26.5k data, real estate remained more popular
29.3k
among households with annual incomes
20% between INR 2-5 lakh per annum. We also

observe a revival of interest in real estate

for the higher income groups (INR 5 lakh

15%

to 1 million per annum, and more than INR

1 million per annum) since January-March

10%
2021, but a dip in April 2021.

5% In Figure 3, we look at “business” as an

5-10 Lakh

investment avenue for respondents. We see

>10 Lakh
a broad increase in business’ popularity
00%
since January-March 2017 (except a minor
Q1 ’17

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’19

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21
dip in July-September 2020). This may be

explained by the fact that business

investment is also an income generation

All Groups 2-5 Lakh 1-2 Lakh <=1Lakh
activity. With incomes hit, there may have

been added incentive to invest in

businesses to ensure that income flow is

Figure 2: Intention to save in real estate by income group
less affected. Moreover, with Covid-19,

(Intention to save in next 120 days in percent) new opportunities to earn came into

existence (e.g. home deliveries, mask-

.
making etc) which may explain why

10% investment in businesses doesn’t exhibit

the trends other saving instruments show.

8%

Not surprisingly, the richest group of

6% households (income greater than INR 1

million) show the highest propensity to

4% invest in business. There was an increase in

intention to save in business in Q1 2021,

2% 5-10 Lakh but in Q2 2021, this took a strong hit

>10 Lakh because of the devastation unleashed by

All Groups
00% the strong second wave of coronavirus
Q1 ’17

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’19

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21

hurting Indian economic activity. As is the

case with several other economic

aggregates like employment or output, the

2-5 Lakh 1-2 Lakh <=1Lakh downward trend in intention to save started

before the Covid-19 pandemic, but has

worsened with the pandemic.

Figure 3: Intention to save in business by income group

This reflects current economic uncertainty;

additionally, it shows a vicious cycle.

(Intention to save in next 120 days in percent)
Household savings that get channelled into

real estate or business can provide a boost

to economic activity and help the economy

12% to recover. But if people are hesitant to

lock their money for longer periods

10%
because of the precarity of the current

8% >10 Lakh economic situation, that makes the

2-5 Lakh prospects of future recovery that much

6% 5-10 Lakh
weaker. The only way to break this vicious
All Groups
4% cycle is for the government to impart a
1-2 Lakh
strong fiscal stimulus, put money in the
2% <=1Lakh
hands of households as we have outlined

00% earlier which will help to alleviate

Q1 ’17

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’19

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21

economic anxiety in the present.

31
 4 Originally published on:
Aug 06, 2021 by Ankur Bhardwaj and Sabyasachi Das

With a higher tolerance for taking risk and more funds to

Shifts in Savings invest, richer households have enjoyed significantly
Preferences - II higher returns from mutual funds, and listed shares (as
compared to other saving instruments).

Key Insights
Between Jul-Sep 2017 and Jan-Mar Two sharp dips in intention to save Fixed deposits saw a general
2020, mutual funds became very in all the savings instruments were weakening of popularity in the
popular among households earning observed - during the first and period Jan-Mar 2017 to Apr 2021.
more than INR 1 million per annum

second wave of the Covid-19 However, this trend was reversed

pandemic for the highest income group
Life insurance as a savings
instrument hit the peak of
popularity in Jul-Sep 2018 for all
income groups and has seen a
steady decline since then

How has the Covid-19 pandemic affected percentage of surveyed households who insurance, and fixed deposits. There has
personal (household) savings? There is a intend to save in a particular instrument (or been a sharp decline in the popularity of
trade-off between current liquidity and avenue) for example gold or real estate or fixed deposits since Apr-Jun 2018 while
locking money away in assets. Part 1 fixed deposits, in the next 120 days from life insurance has seen a decline after the
focused on intention to save in gold, real the date of survey. The CMIE data Covid-19 pandemic hit India (Jan-Mar
estate, and business. We saw that there was provides these percentages for all 2020). We also see an increase in the
a downturn in intention to save that started households as well as broken down by popularity of provident fund to save among
in 2017 but was made worse by the slabs of annual household incomes. We all income groups while mutual funds, and
pandemic. In this part, we examine life look year changes on a quarterly basis as listed shares have maintained a consistent
insurance, provident fund, fixed deposits, the CMIE data is nationally representative level of interest between Jan-Mar 2017 and
mutual funds, and listed shares as on a quarterly basis. When we look at data Apr 2021.
instruments for a household to invest its for all five instruments, we find a broad
savings in. CMIE provides us the decline in intention to save in life

Figure 1: Intention to save in life insurance by income group

(Intention to save in next 120days in percent) Figure 1 depicts the intention to save in life
insurance over the next 120 days for all
income groups and all quarters starting
Jan-Mar 2017. We see a similar pattern
80%
across all income groups in the increase
and decrease in the popularity of life
insurance. Life insurance hit the peak of
popularity in Q3 2018 (for all income
60% groups) and has seen a steady decline since
>10 Lakh then. The sharpest decline in intention to
5-10 Lakh
save in life insurance is seen in Q2 2020,
40% the first quarter after India was hit by the
Covid-19 pandemic. It recovered slightly
2-5 Lakh in the two following quarters and then
20%
All Groups declined again after Q1 2021 when India
1-2Lakh was hit by the second wave of the
<=1Lakh pandemic. The decline in intention to save
in life insurance could perhaps be
00% attributed to reduction in household
earnings because of the Covid pandemic.
Q1 ’17
Q2 ’17
Q3 ’17
Q4 ’17
Q1 ’18
Q2 ’18
Q3 ’18
Q4 ’18
Q1 ’19
Q2 ’19
Q3 ’19
Q4 ’19
Q1 ’20
Q2 ’20
Q3 ’20
Q4 ’20
Q1 ’21
Q2 ’21

32

 .
In Figure 2, we plot the intention to invest Figure 2: Intention to save in mutual funds by income group

in mutual funds by all income groups. For

(Intention to save in next 120 days in percent)
all income groups combined, mutual funds

hit the peak of their popularity as a saving

avenue in Q1 2020. This could be

attributed to the sharp increase in interest 30%

in this category for those households

earning more than INR 1 million per

20%
annum. Mutual funds became more and

more popular for this income group

between Q3 2017 and Q1 2020.

>10 Lakh
10%

5-10 Lakh
In Figure 3, we plot the intention to save in
00%
listed shares for all income groups

Q1 ’17

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’19

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21
between Jan-Mar 2017 and Apr 2021. The

story of listed shares popularity echoes that

of mutual funds. They remain of interest

largely to those households earning

All Groups 2-5 Lakh 1-2 Lakh <=1Lakh
between INR 500,000 to a million or more

per annum. For the households with

income more than INR 1 million per

annum, listed shares see a rise in popularity

till Jan-Mar 2020 (just like mutual funds)

and then see a dip after the first wave of

Figure 3: Intention to save in listed shares by income group
Covid-19, and another dip after the second

wave of the pandemic.

(Intention to save in next 120 days in percent)

As we noted in part 1 of this two-part

series, high net worth individuals are

30%
under-represented in all household surveys,

everywhere in the world. It is because of .

the difficulty in getting the super-rich to

20%
answer survey questions. CMIE data has

some representation of households earning

more than INR 1 million per annum.

10%

In Figure 4, we look at fixed deposits as an

investment avenue for responding >10 Lakh

households. While we see a general 5-10 Lakh

00%

weakening of their popularity over this

Q1 ’17

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’19

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21
period, it is the reverse for the highest

income group (households earning more

than INR 1 million per annum). For all

income groups combined, fixed deposits All Groups 2-5 Lakh 1-2 Lakh <=1Lakh

saw peak popularity as an investment

avenue in Jan-Mar 2018 while for

households earning more than INR 1

million per annum, the peak of popularity

was seen in Oct-Dec 2018. Fixed deposits

Figure 4: Intention to save in fixed deposits by income group
have remained relatively more popular

since then for this income group even as its (Intention to save in next 120 days in percent)

wider popularity has gone down

substantially.

40%
The decline in popularity of fixed deposits

could be attributed to the low interest rate

30%
regime of the RBI. With banks like SBI,

and HDFC offering interest rates of only 4

to 6 percent on FDs, they have become less 20%

>10 Lakh
popular as an investment avenue.
5-10 Lakh

10%

All Groups

00%
Q1 ’17

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’19

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21

2-5 Lakh 1-2 Lakh <=1Lakh

33
 .
Figure 5 plots the intention to save in Figure 5: Intention to save in provident fund by income group

provident fund for all income groups.

(Intention to save in next 120 days in percent)
Unlike other saving/investment avenues,

provident fund remains consistently

popular. We observe that this is especially

true for lower income households in the

60%
CMIE data. For the higher income groups
>10 Lakh
(INR 500,000 to a million or more than
5-10 Lakh

INR 1 million per annum), provident fund

40%
has become more popular as a saving

avenue in this period.

The consistent popularity of PF could be 20%

2-5 Lakh

attributed to its linkage with salaries

All Groups
(owing to job regulations). As contribution
1-2Lakh
to PF is defined by regulation, it makes it 00% <=1Lakh

Q1 ’17

Q2 ’17

Q3 ’17

Q4 ’17

Q1 ’18

Q2 ’18

Q3 ’18

Q4 ’18

Q1 ’19

Q2 ’19

Q3 ’19

Q4 ’19

Q1 ’20

Q2 ’20

Q3 ’20

Q4 ’20

Q1 ’21

Q2 ’21
harder to shift out of a provident fund plan.

We have seen two dips in intention to save

in all the savings instruments included in

this bulletin. We observe the first sharp dip \of the equity markets in this period (Jan- more funds to invest, richer households

when India saw the first wave of Covid-19 Mar 2017 to Apr 2021). The S&P BSE have enjoyed significantly higher returns

pandemic, followed by a brief recovery, Sensex has gone from 26,366 (closing on from mutual funds, and listed shares (as

and then another sharp dip in the first January 31, 2017) to 48,782 (closing, April compared to other saving instruments).

quarter of 2021 when India was hit by the 31, 2021). The keen interest shown by With the pandemic putting restrictions on

second wave of the pandemic.

Foreign Institutional Investors (FIIs) in the luxury spending (vacations, dining out,

Indian market is credited as the reason for going out to watch a movie, buying a new

We note that unlike other saving this stock market rally in India. India saw vehicle or buying new clothes/shoes etc.),

instruments, for equity market linked FII inflows of $37.6 billion in 2020-21, the these rich households would also have

instruments (listed shares or mutual funds), highest among emerging markets. The more funds left to invest (as luxury

the intention to save has been growing over pandemic has also seen a rise in first time expenditure is constrained). Thus, richer

time in the pre-pandemic period. This is investors in the Indian stock markets which .
households investing more in listed shares

especially true for high income households. has driven them upwards.

or mutual funds can contribute to

From the starting point of Jan-Mar 2017, increasing inequality in the country and the

we see a significantly higher share of According to some experts, markets have pandemic can exacerbate it.

households intend to invest in mutual been driven up by these 14.2 million new

funds, and listed shares in Apr 2021.

investors in 2020-21. They now account

for 45 percent of trading turnover in the

This could partly be explained by rich NSE.

households’ greater tolerance for risk, or it

could also be attributed to the performance

With a higher tolerance for taking risk, and

34
 How Covid-19 has Changed Household

Financial Flows
by Akshi Chawla

Key Insights

Household incomes, wages, Urban expenditure also took longer By January 01, 2020, the popularity

expenditure, savings – all took a to reach pre-pandemic levels as of FDs had waned. The three most

sharp hit during the Covid-19 compared to expenditure in rural preferred methods to save were life

pandemic, particularly during the households

insurance, post office savings and

initial months of the lockdown

provident fund

Not only were savings affected in

Urban household incomes shrank terms of quantum, the last few During the pandemic year, chit

more than rural ones during the years have seen a churn in the most funds gained popularity. By October

pandemic. By June 2022, in rural preferred ways to save

2022, life insurance, chit funds, and

India, incomes were marginally provident fund are the three most

higher than what they were at the At the beginning of 2018, surveyed popular ways to save based on

beginning of 2020, but urban India is households were most likely to respondents’ expressed intent

yet to exceed those levels express an intention to save through

life insurance, fixed deposits and

provident fund

:
Figure 1 Average monthly household incomes (INR), rural versus urban

26000 Urban

22000
Total

18000 Rural

14000

10000

6000

00
Q1 ‘18

Q2 ‘18

Q3 ‘18

Q4 ‘18

Q1 ‘19

Q2 ‘19

Q3 ‘19

Q4 ‘19

Q1 ‘20

Q2 ‘20

Q3 ‘20

Q4 ‘20

Q1 ‘21

Q2 ‘21

Q3 ‘21

Q4 ‘21

Q1 ‘22

Q2 ‘22

Q3 ‘22

Figure 1 shows how average household household incomes were hit harder – they x
urban India is yet to e ceed those levels .

incomes have changed since 2018. As our halved between January and April 2020,
bulletin from February 2021 had noted, while in rural India, incomes shrank by Wages also saw a similar impact of the

average household incomes took a sharp almost 29 percent in this period. Beginning pandemic. They halved between January

hit during the Covid-19 pandemic, June 2020, incomes started recovering and April 2020, and reached pre-pandemic

particularly during April and May 2020. gradually. By June 2022, average levels by the second half of 2021. By June

On average, households were earning INR household monthly incomes returned to 2022, the average monthly wage rate was

20,290 per month at the beginning of 2020. pre-pandemic levels. In rural India, the INR 4,015 with urban and rural wages

By April, the average income had shrunk incomes are marginally higher than what being INR 5,4 93 and INR 3,350
by almost 40 percent to INR 12,527. Urban they were at the beginning of 2020, but respectively.

35
As incomes plunged during the early
months of the Covid-19 pandemic, so did
expenditure. Figure 2 shows average
monthly household expenditure since
January 2020. On average, the monthly
again.
household expense was INR 7,397 in April
2020, 41.5 percent lower than at the
beginning of the year. Urban expenses
shrank more than rural expenses, and
average monthly expenses reached pre-
pandemic levels only by August 2021.
However, urban expenditure took longer to
recover. It is only at the beginning of 2022
that urban expenditure was back to the
levels of January 2020, while rural
expenditure had reached similar levels to
Figure 2: Average monthly household expenditure (INR), rural versus urban
16000
12000
8000
4000
00
Apr ‘20
Jul ‘20
Oct ‘20
Jan ‘20
As figure 3 shows, at the beginning of
2018, the three most preferred ways of
savings included life insurance (25.1
percent households saying they would save
via this measure), fixed deposits (21.6
percent) and provident fund (9.3 percent).
funds have remained popular among
By January 01, 2020, the popularity of FDs
had waned, while more households
expressed their intent to save via a life
insurance policy. At that time, almost a
third of households surveyed (32.8 percent)
said they would save in a life insurance
said they intended to save through gold in
scheme, followed by 14.3 percent who said
they would invest in post office savings. PF
annual income above 10 lakhs? At the
was still the third most preferred
mechanism – 11.3 percent households said
they would invest in the same. But the
popularity of post saving schemes
dwindled soon. Less than a year into the
pandemic – at the beginning of 2021 – chit
funds had gained popularity. At the time, a
January 2020 by July 2021. As of June
2022, on average, households spend INR
13,998 per month with urban households
spending INR 16,355 on average and rural
ones spending INR 12, 838 on average.
As our previous bulletins showed, Indians’
propensity to save in any form of
investment took a sharp hit during the
pandemic. At the beginning of 2020, half
of Indians surveyed during the CMIE-
CPHS said they were planning to save in
some source of investment in the next 120
days. By May, the share of such
Jan ‘21
Apr ‘21
Jul ‘21
Oct ‘21
quarter of those surveyed still preferred
savings in life insurance, followed by 11.2
percent of households who wanted to save
via PF. Nine percent of households said
they would be investing in chit funds. Chit
through gold in the next 120 days. But this
approximately a tenth of households ever
since. At the start of October 2022, LIC,
chit funds and PF remain the three most
popular ways to save with 31.2 percent,
11.8 percent and 11.3 percent households
saying they intend to save via these
measures in the next 120 days.
We dive into different saving options next.
Gold: Indians’ stated intention of saving via
gold took a hit during the pandemic. From
7.4 percent households saying they
intended to save through gold in January
2020, the share dropped to less than half –
by March, only 3.5 percent households said
households had fallen down to 35.9
percent. It dipped further to 31.8 percent by
November 2020 before more households
started expressing their capacity to save
At the beginning of October 2022, 47.5
percent of those surveyed said they will
save in some source over the next 120
days. Indians’ savings preferences have
seen a conspicuous churn in the past five
years.
Urban
Total
Rural
Jan ‘22
Apr ‘22
they would invest through gold in the near
future. The preference for saving in gold
has not returned to pre-pandemic levels
ever since. In October 2022, only 3.3
percent of households said they would save
reduced preference is not uniform across
income levels. Among households that earn
less than INR 1 lakh annually, there are
hardly any who said they would invest in
gold. But among those with annual
incomes between 5-10 lakh, 10.2 percent
the coming months. In households with
beginning of October 2022, nearly a
quarter (23 percent) said they would save
in gold in the next 120 days. The
preference for savings through gold is not
only higher among the rich, this preference
has increased steadily since 2018.
36
Figure 3: Stated preference to save in different modes of savings
(Percentage of respondents who said they intend to save in the following modes in the next 120 days)

Saving Mode 01 Jan 2018 01 Jan 2019 01 Jan 2020 01 Jan 2021 01 Jan 2022 01 Oct 2022
Gold 7.0 7.7 7.4 0.8 3.4 3 .3
Real Estate 4.8 6.2 6.0 0.2 3.4 1.1
Fixed Deposit 21.6 10.0 8.0 3.7 3.5 4.8
Life Insurance 25.1 32.4 32.8 25.3 25.2 31.2
Post Office
Savings 5.1 10.6 14.3 2.4 4.0 6.3
Provident Fund 9.3 11.8 11.3 11.2 10.5 11.3
Business 1.3 4.5 4.7 4.6 5.7 6.6
Chit Fund 1.0 4.3 9.7 9.0 9.7 11.8
Mutual Funds 0.4 0.7 1.2 0.8 0.6 1.3
National Savings 0.3 0.6 0.5 0.1 0.1 0.3
Certificate Bonds
Listed Shares 0.1 0.3 0.7 0.3 0.2 0.5
Kisan Vikas Patra 0.2 0.2 1.0 0.0 0.1 0.1
Others 4.1 5.5 6.7 4.3 3.9 4.4

Real Estate: Real estate was virtually off households – despite high preference in Provident Fund (PF): A distinct pattern
the savings landscape during the early early 2018 – seem to have given up on this about PF is that unlike other modes of
months of the Covid-19 pandemic in India. mode of saving since the beginning savings, the pandemic did not have much
While 6 percent of the households Covid-19 pandemic.

of an impact on people’s stated intent to

surveyed at the beginning of 2020 had
expressed the intent to save via real estate,
by March, only 0.7 percent households
expressed a similar intent. Ever since,
while there has been some increase in the
share of households who say they would
invest in real estate in the near future, it has
not reached the pre-pandemic level yet. In
with annual income of less than one lakh
October, only 1.1 percent of households
said they would save through real estate,
with the richest households most likely to
say so.
Life Insurance: Life insurance policies
and schemes have consistently remained
the most popular mode of savings for
years. While a quarter of those surveyed at
the beginning of 2018 had said they would
save through life insurance in the next 120
days, by October 2022, this share was 31.2
percent of households. Like for all other
methods, intention to save on life insurance
declined during the pandemic, but it
save through this method. PFs have
remained one of the more preferred
measures of saving across years – around a
tenth of people surveyed by CMIE have
consistently expressed that they wouldsave
in PF in the near future since 2018. But
there is a stark class divide – households
rupees – [less likely to be in formal
employment] – hardly use this way, while
among the two richest groups preference

recovered soon. However, wide disparities for saving via PF remains widespread. In
exist between households by income October 2022, 55.6 percent of households
Fixed Deposits (FDs): FDs were one of categories – expressed intent to save in life with annual income between 5-10 lakh
the most popular measures for savings till a insurance is significantly higher in richer rupees, and 35.2 percent of those earning
few years ago. Over a fifth of households households as compared to the poorest more than ten lakhs annually said they
surveyed at the beginning of 2018 had ones.

would save via PF in the next 120 days,

expressed an intention to save in an FD in compared to 0.19 percent of those with
the next 120 days – with poorer households Post office savings: Around the second annual income under one lakh, and 2.5
with annual income less than INR 1 lakh half of 2018 onward, post office savings percent of those earning between one to
most likely (31.4 percent) to express such seemed to be gaining popularity among two lakhs annually.

an intent. However, their popularity started
to dip soon. By September 2018, only a
tenth of households said they would save
in an FD over the next 120 days. By the
beginning of 2020, 8 percent households
expressed an intent to save in an FD. And
then on, the preference plummeted.
Indians. Over a tenth of Indians expressed
their willingness to save through this
measure through much of 2019, and by the
beginning of 2020, 14.3 percent of those
surveyed said they intended to save via the
post office in the next 120 days. Like other

measures, intention to save through post

Only 4.8 percent households said they
would save in an FD in October 2022 –
with richer households showing a much
stronger preference. The poorest
office savings also plummeted during the
pandemic, and it continues to remain low
even in 2022. Richer households are more
likely to express an intent to save this way.
37
Chit Funds: A noteworthy trend in the Even during the initial period of lockdown have said they would save through mutual
past few years has been the growing stated (in April and May 2020), almost 8 percent funds across the years since 2018. There
interest of people to save through chit households said they would save in a chit are few who prefer to save through Kisan
funds. Chit funds combine savings and fund in the coming days. Households with Vikas patras or even NSC bonds.

credit and are rotating funds. A group of
individuals comes together and each
member contributes a certain amount. The
total combined pool is then auctioned off to
one member each month. While people
from across income groups use this
method, members of chit funds are more
likely to come from low-income
households (Kapoor et al, 2012; Jain, 2016;
annual incomes between INR 2-10 lakh
have higher shares of respondents who
express an interest in saving through this
measure. Among the richest households,
preference for chit funds is relatively
recent. It is since February 2021 that a
higher share of households with annual
income of 10 lakh or more express interest
in saving via chit funds in the near future.
Business: Since 2018, the share of those
saying that they intended to save through
business has grown – from 1.3 percent of
those surveyed at the beginning of 2018 to
6.6 percent by October 2022. This is one
measure where preferences are not as
skewed with income as they are seen in

other modes of savings. The pandemic did

Menon, 2017). And while these funds
might be a good way for members to
access credits, chit funds are also notorious
for scams leaving those who use them
vulnerable to losing their money. Through
much of 2018, less than two percent of
those surveyed said they would save in a
chit fund in the next 120 days. By January
2020, this share had grown to almost a
tenth (9.7 percent) of all respondents.
not impact people’s intention to save in
Mutual funds, listed shares, NSC bonds business.
and Kisan Vikas patras: Savings through
investing in the markets – either via mutual
funds or by buying listed shares – remains
a preference confined mainly to the richest
households. Consistently, less than one
percent of those surveyed have expressed
an intention to buy listed shares and
similarly, about one percent respondents

38
2022, Centre for Economic Data and Analysis (CEDA), Ashoka University and Centre for Monitoring Indian
Economy (CMIE)

Data visualisations: Kaustav Dutta and Mayukh Nair

Design: Kaustubh Khare

If you wish to republish any parts of this compilation or use a chart, please read CEDA’s republishing
guidelines on our website

Email: ceda@ashoka.edu.in