Employment loss vis-a-vis pre-Covid situation 'neutralized', claim Govt of India data

By Arup Mitra, DPS Negi, Puneet Kumar Shrivastav*
The Labour Bureau, an attached office of the Ministry of Labour & Employment, has been entrusted with the task of conducting the All-India Quarterly Establishment based Employment Survey (AQEES) which has two components namely Quarterly Employment Survey (QES) in respect of establishments employing 10 or more workers (mostly constituting ‘organised’ segment) and Area Frame Establishment Survey (AFES) to build up a frame in respect of establishments employing nine or less workers.
The Report which was launched on September 27 is the First Round of Quarterly Employment Survey of the organized sector units in the non-farm sector. It refers to the first quarter i.e., April to June 2021. In fact, this is the first formal (Government) report aftermath COVID-19, on employment estimates based on the organized sector establishment survey. It also tries to capture the impact of COVID on employment as estimates are provided for March 2020 and July 2020 as well.
This survey of the organized sector establishment-based employment does not capture employment data from units which emerged after the Sixth Economic Census in 2013-14. Besides, the survey work for the first quarter of this organized sector establishment-based employment survey corresponds to the period of second wave of Covid-19 pandemic and in view of the surge in Covid-19 cases across the country, several lockdown restrictions were imposed by respective State/ UT authorities. As a result, data collection was mainly carried out telephonically and through visits by investigators wherever possible.
An interesting pattern which emerges from the size distribution of the units (Table 1) as on April 1, 2021 is that a very significant percentage of the units are located in the employment size category of 10-39. Except IT/BPOs and construction in the rest of the sectors more than 50 percent of the units are placed in this size category. Next to this is the size comprising 40 to 99 workers.
Though an almost equal proportion of the units at the aggregate level are also present in the smallest size category (less than 10), construction, education, health and IT/BPOs unravel a relatively much higher percentage in the 40-99 size category compared to the bottom one. From this distribution pattern the phenomenon of missing middle (employment-wise) does not seem to be overwhelming any more. Also, the bottom-heavy pattern is not evident significantly. Some of the small units may have graduated to the organized sector and secondly, the new entries in response to the startup India scheme cannot be undermined.

Between July 2020 and April 2021 massive employment growth (more than 7%) seems to have taken place which compensating for job loss during lockdown

Information was collected on whether the organized sector units were registered under MSME Act/Udyam portal. Sector-wise percentage distribution of estimated establishments registered under MSME Act/Udyam portal highlights that about 17.7% of the estimated establishments were registered under MSME Act. The maximum percentage of registered establishment was reported for the manufacturing sector (43.9%) followed by IT/BPOs (24.8%) and construction (19.8%). Further, out of the total establishments registered under MSME Act, about 86.1% were registered under Udyam portal with a maximum incidence in the Health Sector (97.0%) followed by Financial Services (93.8%).

One significant contribution of the report lies with the fact it offers information to assess the impact of Covid-19 and the lockdown on employment. During the lockdown of 2020 only one-third of the units were operational except in the case of financial services and health (Figure 1). Comparing the figures prior to March 25, 2020 with the figures pertaining to July 1 2020, nearly one third of the units witnessed employment decline.
Across the sectors manufacturing, construction and trade are seen to have suffered the maximum employment loss. Further, though both males and females at the aggregate level do not seem to have registered differential growth rates of employment decline, within some of the sectors like manufacturing, construction, trade and health the female employment fell much more sharply than the male employment.
However, comparing the figures for April 2021 with the pre-Covid situation, the employment loss is found to have been neutralized as the growth rate turns out to be closer to zero (Table 2). In other words, the economy by and large restored the level of employment in April 2021, though the impact of the second wave is yet to be seen. In other words, between July 2020 and April 2021 massive employment growth (more than 7 per cent) seems to have taken place which compensated for the employment loss perceived during the nationwide lockdown of the 2020.
During the lockdown of 2020 around one fifth of the units could not afford full payment to the employees (Table 3). Manufacturing and construction were among the worst-affected sectors. Even the sectors like health and financial services, which were active during the lockdown, experienced reduced payment to the employees in nearly 10 per cent of the establishments.
The database on the whole offers a snapshot of the economy and such information will be relevant for employment planning on year-to-year basis.
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*Respectively: Professor in Institute of Economic Growth; Principal Labour & Employment Advisor (PLEA), Ministry of Labour & Employment; Young Professional, Labour Bureau, Ministry of Labour & Employment

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