In a bid to shore up the economy, the finance minister unveiled eight new measures aimed at aiding the sectors most affected by the pandemic.

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What does this mean for the economy and how will it impact the labour, especially unorganised labour, to understand this better CNBC-TV18 spoke to Manish Sabharwal, Member, CAB & CAG India, a governing board member at the National Council of Applied Economic Research (NCAER) and the Chairman & co-founder at Teamlease Services.

Sabharwal said, “Hiring is being largely done by consumer durables, consumer products companies. Exports are obviously very robust, but the hiring right now at the bottom of the pyramid is happening, as we have said in sales, customer services, and logistics; corporate India is expanding, so in the last two years, the structural change is the long tail of corporate India expanding.”

He further added, “I think unemployment is a weak metric for strength or weakness in India’s labour market because of three reasons, self-exploitation, farm employment and labour force withdrawal. I think the arguments, which always tend to focus on quantity of employment often ignore quality of employment. I think it is time for us to sort of look at labour markets through the lens of wages rather than probably unemployment.”

He added, “I think the second wave and the first wave have been very different economically and medically. Economically, the first wave was crushing, we went down 25-30 percent in the first quarter of last year, while this year we haven’t. I think that is because corporate India had seen this before. Manufacturing was not affected by the second wave, informal retail was not affected by the second wave, so it is very important for us to recognise that the second wave has been so different from the first economically. Obviously, medically it has been crushing.”

On hiring, Sabharwal said, “April, May and June is flat because of the second wave. If the second wave hadn’t hit, we would have been higher than the last normal year that we had. Now is that pent-up or is that new demand, is always hard to unpack, but there is no question that if the second wave hadn’t happened, this year would have been much better than last to last year.”

For full interview, watch accompanying video.

(Edited by : Dipika)

First Published:Jun 29, 2021 12:54 PM IST