In line with the measures taken by United States and other countries, the central government is planning to give unemployment benefits to a section of organised workers, who may lose their jobs due to the coronavirus pandemic.
In US, a record 3.2 million people in the US have already applied for unemployment benefits last week after losing their jobs due to coronavirus crisis, according to the Fed.
“Millions of Americans are filing for benefits and that means the economy is not just staring down at the abyss, it has fallen off the cliff and down into the depths of recession,” reported New York Post, quoting MUFG Union Bank Chief Financial Economist Chris Rupkey said.
The magnitude of the virus hitting the labour market can be seen in staggering number for the week ending March 21. It was more than three million higher than the prior week’s revised total of 282,000.
The International Labour Organization has estimated that up to 25 million people might become jobless worldwide.
During the global financial crisis of 2008-09, an estimated 22 million people had lost their jobs, according to the ILO.
India also is hit by coronavirus. For example, the airlines have already grounded their planes and asked the pilots to go on leave without pay.
The travel, tourism, hospitality and retail, also have been hit. India’s import-dependent sectors like automobiles and pharmaceuticals, will also take a hit due to disruptions in global trade.
The government has the option of providing unemployment insurance to workers under the government’s “Atal Beema Vyakti Kalyan Yojana”.
This scheme can be availed by those jobless workers who have subscribed to the Employees’ State Insurance (ESI) scheme.
The ESI is a self-financing health insurance scheme for formal sector workers in India managed by the Employees State Insurance Corporation (ESIC).
Under the scheme, which has been operational since July 2018, workers who become unemployed get compensation in the form of cash up to three months of unemployment, but this can be availed only once in a lifetime.
“The labour and employment ministry is looking to extend the scheme and allow workers to avail of unemployment insurance if they are impacted by coronavirus,” reported Business Standard.
Workers get cash to the tune of 25 per cent of the average salary that they were getting in the last two years of their job under this scheme.
However, an important condition for workers to get the unemployment benefit is that they should have been a subscriber of the ESIC for at least two years. When the scheme was made effective in July 2018, around 1 million workers were eligible.
In the US, the experts had expected huge cuts in jobs this week due to the pandemic crisis, but not more than one million applications, in a Reuters survey.
The services industries continued to take a hit, while other sectors such as healthcare, arts, entertainment and transportation also contributed to the jump, officials said.
The lockdown steps in several states could cause unemployment rate to match or exceed its 10 per cent peak during the financial crisis of the late 2000s, experts said.
That would mark a staggering increase from 3.5 per cent unemployment in February.
The US economy already is dealing with an unprecedented drop in consumer demand and now is on the verge of further exacerbating by a huge increase in unemployment due to the virus outbreak, Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, said in a statement.
To overcome this, the $2 trillion stimulus package the Senate had passed “is what is required to begin providing help to he