How a low income state of India managed the unemployment situation during COVID-19? Lessons for future pandemic management.

Abstract

Background: The partial and complete lockdown to curb the spread of COVID-19 caused enormous economic and social disruptions throughout the world. India witnessed the sharpest decline in its Gross Domestic Product (GDP), and the unemployment rate rose sharply in the first quarter of 2020-21. Odisha, one of the low income states of India, has faced a steep rise in unemployment, with lakhs of migrant workers returning to the state. This article attempts to examine Odisha's unemployment situation compared to the low-income states of India as well as with the national average during COVID-19. This also investigates to what extent the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provided relief to the people by providing short-term employment opportunities.

Design: This is a descriptive study and is based upon repetitive cross sectional secondary data on unemployment rate and labour force participation rate across the low-income states of India.

Method: The study used descriptive statistics to analyze the secondary data from the Center for Monitoring Indian Economy (CMIE) and MGNREGA report. The labour force participation rate (LFPR) and unemployment rate (UER) data were collected from the CMIE trimester reports. The information related to number days of employment demanded and employment provided were collected from the MGNREGA reports. Total time period was divided in to two parts - 2017-19 pre pandemic period and 2020-2021 pandemic period.

Results: The analysis of UER revealed that the unemployment situation in Odisha was better than the low-income states and overall India. The UER during COVID-19 (Sep-Dec 2020 to Sep-Dec 2021) was lower than the pre COVID-19 level in Odisha (1.6% in Sep-Dec 2020), compared to all India, where this was more than the pre-COVID-19 level (7.4% in Sep-Dec 2020). Odisha government had nearly doubled the employment generation through MGNREGA during 2020-21.The state government undertook a number of proactive measures - increasing wage rate, providing extra days of work in vulnerable districts to address the unemployment situation during the pandemic.

Conclusion: The state government's effort to manage the livelihood crisis was notable during the pandemic.. Proper implementation of the wage employment programmes led to higher decline in the UER in Odisha compared to other states These experiences can be emulated by other states or countries.