Increments form the tip of the iceberg: Misery below

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The last financial year brought an unprecedented combination of misery and rewards for the employees of the Indian corporate sector. While lakhs have lost jobs and had wages slashed, some are being handsomely rewarded by different companies in information technology, financial services, healthcare, e-commerce, tech start-ups, FMCG and BPO. These companies have made spectacular profits riding on the lower employee, financial, and establishment costs. While that certainly calls for celebration in the families of these fortunate few, there are other vast sectors both in India Inc and the broader economy that continue to live under distress.

First, there are employees in other sectors of the economy such as hotels, entertainment, travel, manufacturing, real estate who are not that fortunate and are facing varying degrees of hardship. Second, beyond the corporate sector, an immense number of people have lost their jobs both in the first and second waves of the pandemic, many of whom have sunk into poverty. As many as 2.27 crore Indians lost their jobs in the second wave of the pandemic in April and May. May was the worst month when the average unemployment rate zoomed to 11.90%.

Though with the gradual relaxation of the restrictions in different states, the unemployment rate has started creeping down, the policymakers are confronted with a vast ocean of joblessness. After a long gap of about eight weeks, the 30-day moving average of rate of unemployment returned to the single-digit territory on June 25 and has been inching down since. But the unorganised sector is perhaps the worst off with a direct linkage to day-to-day wages with the restrictions and very little savings to fall back on.

Ironically, Central government employees, the most secure of the salaried class, are also among the suffering middle class. Their dearness allowance has been frozen since January 2020. Well over 1 crore employees are directly affected.