Comprehension

COVID-19 infections are once again on the rise with daily infections crossing 60,000 per day last week. This is considerably higher compared to the reported infections during the same period last year when the numbers were less than 500 per day. What is obvious is that the pandemic is far from over despite the availability of vaccines. However, unlike last year, the response this time has been muted with no nationwide lockdown. One of the reasons for the differing responses is the lesson from the unintended consequences on the economy of the strict lockdown last year. While aggregate estimates on the growth rate of GDP showed a sharp contraction in economic activity (the economy shrunk by 24 per cent in the April-June quarter of 2020) the impact on lives and livelihoods is still unfolding even though the sharp contractionary phase seems behind us. The extent of the loss of lives and livelihoods is becoming clear only now, with detailed data from the Periodic Labour Force Surveys (PLFS) - the latest round of which is for the April-June quarter of 2020. This is the first official report on the estimates for the quarter, which witnessed the worst impact with the lockdown in force until the middle of May. Visuals of thousands of migrants walking back to their villages are still fresh in the mind. While many have returned to urban areas in the absence of jobs in rural areas, many did not. The PLFS, which captures the employment-unemployment situation in urban areas, provides some clues to what happened. The estimates from PLFS are broadly in line with estimates available from other privately conducted surveys, notably the unemployment surveys of the Centre for Monitoring Indian Economy (CMIE). According to the PLFS April-June 2020 round, the urban unemployment rate for the population above the age of 15 was 20.8 per cent, which is close to the monthly average for the same quarter from CMIE at 19.9 per cent. The CMIE data, however, does suggest a sharp decline in June compared to April and May. Similar to the CMIE data, the PLFS data also shows a sharp rise in the unemployment rate which more than doubled compared to the unemployment rate in the preceding quarter of January-March 2020 at 9.1 per cent and 8.8 per cent in the same quarter (April-June) of 2019. While one in five persons above the age of 15 was unemployed during April-June 2020, the unemployment rate among the 15-29-year-olds was 34.7 per cent - every third person in the 15-29 age group was unemployed during the same period. These are staggering numbers, but not surprising. While the lockdown certainly contributed to the worsening of the employment situation, particularly in urban areas, the fact that the economy was already going through severe distress as far as jobs are concerned is no longer surprising. Between 2016-17 and 2019-20, growth decelerated to 4 per cent, less than half the 8.3 per cent rate in 2016-17. The fact that the economy has not been creating jobs predates the economic shocks of demonetisation and the hasty roll-out of GST. The PLFS data from earlier rounds have already shown the extent of the rise in unemployment compared to the employment unemployment surveys of 2011-12. The unemployment rates in urban areas for all categories increased by almost three times between 2011-12 and 2017-18. On an internationally comparable basis, the unemployment rate among the 15-24-year-olds in 2017-18 was 28.5 per cent, which makes the youth unemployment rate in India amongst the highest in the world, excluding small countries and conflict-ridden countries. Since then, it has only worsened or remained at that level.

Question: 1

According to the author, which of the following is a plausible explanation for India’s prevalent crisis of unemployment?

Updated On: Jul 18, 2024
  • The previously existing employment crunch is worsened due to the imposition of nationwide lockdown during the COVID-19 pandemic
  • Imposition of nationwide lockdown during the COVID-19 pandemic reduced economic activity.
  • Imposition of nationwide lockdown during the COVID-19 pandemic led to migration of workforce from urban to rural areas
  • There is a sharp decline in urban unemployment rate for the population above the age of 15.
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The Correct Option is A

Solution and Explanation

The correct Answer is (A):The previously existing employment crunch is worsened due to the imposition of nationwide lockdown during the COVID-19 pandemic
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Question: 2

According to the author, what is current state of Indian economy?

Updated On: Jul 17, 2024
  • There is a sharp contraction in economic activity.
  • The aftermath of a sharp contraction in economic activity is being experienced
  • The unemployment rates in urban areas for all categories are increasing by almost three times.
  • Youth unemployment rate in India is at par with that in small and conflict-ridden countries
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The Correct Option is B

Solution and Explanation

The correct Answer is (B):The aftermath of a sharp contraction in economic activity is being experienced
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Question: 3

Which of the following statements cannot be inferred from the given passage?

Updated On: Aug 16, 2024
  • Loss of lives and livelihoods is attributable to the imposition of nationwide lockdown during the COVID-19 pandemic.
  • Decline in economic growth is attributable to the imposition of nationwide lockdown during the COVID-19 pandemic.
  • Rise in unemployment is attributable to the migration of members of workforce from urban to rural areas.
  • Rise in unemployment is attributable to the imposition of nationwide lockdown during the COVID-19 pandemic.
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The Correct Option is C

Solution and Explanation

The correct Answer is (C):Rise in unemployment is attributable to the migration of members of workforce from urban to rural areas.
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Question: 4

Which of the following strengthens the author’s argument that the decline in economic growth and rise in unemployment precedes the onset of the COVID-19 pandemic?

Updated On: Jul 18, 2024
  • While one in five persons above the age of 15 was unemployed during April-June 2020, the unemployment rate among the 15-29-year-olds was 34.7 per cent - every third person in the 15-29 age group was unemployed during the same period.
  • According to the PLFS April-June 2020 round, the urban unemployment rate for the population above the age of 15 was 20.8 per cent, which is close to the monthly average for the same quarter from CMIE at 19.9 per cent.
  • Between 2016-17 and 2019-20, growth decelerated to 4 per cent, less than half the 8.3 per cent rate in 2016-17.
  • The estimates from PLFS are broadly in line with estimates available from other privately conducted surveys, notably the unemployment surveys of the Centre for Monitoring Indian Economy (CMIE).
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The Correct Option is C

Solution and Explanation

The correct Answer is (C): Between 2016-17 and 2019-20, growth decelerated to 4 per cent, less than half the 8.3 per cent rate in 2016-17.
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Question: 5

According to the given passage, which of the following statements is correct?

Updated On: Jul 17, 2024
  • Unemployment rates in urban areas for all categories increased by almost three times over the preceding decade.
  • Employment rates in urban areas for all categories increased by almost three times over the preceding decade.
  • Unemployment rates in urban areas for all categories increased by almost three percent over the preceding decade.
  • Employment rates in urban areas for all categories increased by almost three percent over the preceding decade.
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The Correct Option is A

Solution and Explanation

The correct Answer is (A): Unemployment rates in urban areas for all categories increased by almost three times over the preceding decade.
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