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One year since lockdown 1.0: Services sector distress means journeys of hope are cut short

Each distress story in India’s services sector is unique but all of them face similar questions: The lockdown may have eased but when will demand pick up? What happens with a second Covid wave?

Workers wearing protective masks in a call centre in Uttar Pradesh (Express photo by Vishal Srivastav)

A gelateria in Bengaluru, a top European hotel operator, a tony boutique in a high-end Gurgaon mall, a global HR consultancy — these are far away from factory shop-floors in Manesar or Tirupur but here too, it’s the women who have been hit hard by the Covid distress, losing their jobs and finding re-instatement a challenge.

Like 24-year-old Lavleen Manglani. A Bachelor’s in catering technology from Hyderabad’s Culinary Academy was her ticket out of Ichalkaranji, a town in Maharashtra’s Kolhapur district known for its weaving industry where her father is a cloth trader. She started off with a five-star hotel in Kolkata and then moved as an outlet manager at a gelateria in Bengaluru. Last year’s Covid lockdown cut short her aspirational journey — she is back in Ichalkaranji, struggling to earn a steady income as a home baker.

She’s aware of the privilege her father’s income cushion brings. “I got calls from my subordinates, housekeeping and security guards, for whom things had become really difficult…I sent e-mails to the manager but to no avail…They wanted to cut down on comparatively higher paid employees (so) they did not ask me to join back,” she said.

For Madhu, her work as an Area Sales Manager at a leading hospitality brand backed by one of Europe’s biggest hotel operators became increasingly untenable in the months leading up to the end of the national lockdown.

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Post-lockdown, she did attend office on a rotational basis but in a few weeks, the writing was clear on the wall. “It was just a matter of time,” she said. The hotel did open up to some quarantine guests but heads began to roll as it became clear that full occupancy was a very long way away. She resigned on her own before the company could ask her to go. And she wasn’t alone.

Each distress story in India’s services sector is unique but all of them face similar questions: The lockdown may have eased but when will demand pick up? What happens with a second Covid wave?

What’s clear, though, is that women working in service sectors are much worse off than men. No other sector has been impacted as badly as these beneficiaries of India’s consumption boom, helped in recent years by online apps and delivery options.

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Devastated by the lockdown, demand destruction, and the pandemic itself, restaurants, beauty parlours, spas, retail stores, guest houses, and several other segments of the services sector — unlike IT where work-from-home helped — are struggling to recover.

That struggle translates to countless stories like Manglani’s and Madhu’s: a shock disruption in the aspirational mobility of young women from small towns who were the most visible gainers of the service sector boom.

“The service sectors had been badly affected, including hospitality, airlines. And these sectors, where more women were employed, have not revived fully,” Union Labour Secretary Apurva Chandra told The Indian Express.

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The corollary to this, said Chandra, is that employment of women has been hit harder in urban than in rural areas as urban employment is service-led.

Women in distress tells a larger story, though.

Manish Sabharwal, chairman and co-founder of Teamlease Services, said that the amplification of women’s problems in labour markets underlines how these are inadequately “formalised, urbanised, financialised and industrialised”.

“There are more structural forces at work rather than cyclical forces in women’s labour force participation. The biggest problem for women is informality; cities with bad public transport. The longer the commute times, the less is labour force participation, for women as well as overall. In the short run, Covid is actually a good hearing aid to make the structural reforms happen,” he said.

Sabharwal hopes Covid will trigger reforms in labour, banking, education and urban governance which will, in turn, lead to more labour force participation. “At least in the next 10 years we should target women labour force participation going to 25-40 per cent by more formalisation, urbanisation, liberalisation and skilling,” he said.

Data from the CMIE’s Consumer Pyramids Household Survey (CPHS) in December 2020 flagged some key worrying trends with respect to women’s participation in the workforce in India.

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As against the global trend, in India, urban women participate much less in the workforce than rural women. In 2019-20, female labour participation rate (FLPR) among urban women was 9.7 per cent against 11.3 per cent among rural women.

The lockdown exacerbated this trend. In April 2020, the urban FLPR, according to CMIE, fell to 7.35 per cent — over 200 basis points lower than its average of 9.7 per cent in 2019-20. But even after the lockdown was withdrawn, the urban FLPR did not recover.

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In October 2020, female labour participation in urban India dropped to 7.2 per cent — the lowest since CMIE began measuring this indicator in 2016. In November 2020, it fell further to 6.9 per cent.

The CPHS is conducted over a four-month period called a “wave”. In the January-April 2016 wave, female labour participation rate was 15.7 per cent. This rose to 16.4 per cent in the May-August 2016 wave. It fell in each of the next three waves to stabilise at around 11 per cent in response to the demonetisation shock.

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Then, it fell again in response to the lockdown shock in 2020 to close at around 9 per cent. During September-December 2020, female labour participation rate was recorded to be 9.5 per cent in urban India and 11.6 per cent in rural India.

Yet another area of concern reflected in the CMIE data is that there were job losses in younger age groups below 40 until December 2020, while all age groups above 40 saw a small gain in employment.

This reflects an aging of India’s workforce post-lockdown with the share of those over 40 years of age — which was 56% in 2019-20 — increasing to 60% by December 2020. The share of the relatively young has correspondingly shrunk, which does not bode well, according to Mahesh Vyas of CMIE.

While this is across genders, it hits women harder given their small share in the formal economy amid the looming concern over the revival of the services sector. Vaccinations and a slow return of confidence in people-to-people interactions holds out the only glimmer of hope as the pandemic deepens existing fissures over gender in India’s labour force.

First published on: 25-03-2021 at 04:30:12 am
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