The WEO report notes that the dangerous divergence in economic prospects across countries remains a major concern. Aggregate output for the advanced economy group is expected to regain its pre-pandemic trend path in 2022 and exceed it by 0.9 per cent in 2024.By contrast, aggregate output for the emerging market and developing economy group (excluding China) is expected to remain at 5.5 per cent below the pre-pandemic forecast in 2024, resulting in a larger setback to improvements in their living standards. As the IMF sees it, within this overall theme, what is particularly worrisome is that this gap between recovery in output and employment is likely to be larger in emerging markets and developing economies than in advanced economies.Further, young and low-skilled workers are likely to be worse off than prime-age and high-skilled workers, respectively. This is more than vindicated in respect of India as per CMIE studies, which show that women and low-skilled workers have been most adversely affected as a result of both the slowdown and the pandemic. Indian finance ministry officials are gloating about the ‘V-shaped recovery’ and this week even finance minister Nirmala Sitharaman gave a big picture of Indian economy in her meetings in Washington based on expected high GDP growth in 2021-2, but what the IMF has projected on employment — that the recovery in unemployment is lagging the recovery in output (or GDP) — matters immensely for India.CMIE data amply justifies the IMF contention in respect of India relating to employment not picking up despite increased GDP. CMIE data shows the total number of employed people in Indian economy as of May-August 2021 was 394 million as against 405 million in the same period in 2020, the period of lockdown in India. This means that even after one year and the easing of lockdown in most parts of the country resulting in higher GDP growth in economy, the employment position declined, rather than improving. Thus, the recovery process in 2021-22 has not been accompanied by commensurate employment.The ground reality is that the pandemic-related job losses continued in industrial units even after recovery started and the units started making profits in their operations. The reality is that the industry owners took advantage of the pandemic in streamlining their operations with less people and the employees were the victims of the greed of the employers, which the government’s policies allowed.
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