Employment levels pick up as state governments ease lockdown curbs

Informal jobs show quicker gains; improvement in formal jobs hinges on economic recovery, says CMIE

In the week ended June 13, urban unemployment fell to 9.7%, according to CMIE data.

As states began to ease lockdown curbs with the plateauing of COVID cases, India’s unemployment rate recovered to 9.7%, representing a six-week low, according to data from the Centre for Monitoring Indian Economy (CMIE), a Mumbai-based private think-tank. India’s monthly unemployment rate for May had stood at almost 12%.

The national labour force participation rate of 39.75% in the week ended June 13 was 80 basis points more than that of the week ended May 30, the data revealed. Also, the employment rate of 36.29% was around 2 percentage points higher.

In the week ended June 13, urban unemployment fell to 9.7%, vis-à-vis a monthly unemployment rate of 14.7% in May, said a Mint report citing CMIE data. This marked an 8.18 percentage point improvement over the 17.88% rate seen in the week ended May 30. It was also 3.6 percentage points better than the June 6 figure.

Rural jobs improve, too

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The onset of the southwest monsoon, coupled with the unlock measures, helped job numbers in rural India, too. The unemployment rate improved 2.4 percentage points in the week ended June 13 to 8.23%, against 10.63% in all of May.

Also read: Retail inflation hits 6-month high of 6.3%; breaches RBI’s safe mark

While the latest numbers may be an improvement over the preceding weeks, employment numbers have not yet recovered fully from the second wave of COVID. Between January and April, when the pandemic had tempered, the rate had hovered at 6.52% to 7.97%.

A 7.97% unemployment rate in April marks the erasing of about 7.35 million jobs, including 3.4 million salaried jobs, said Mint.

In April 2020, just after the national lockdown kicked in, India’s unemployment rate hit a record high of 23.52%. From there, it improved to 6.52% in January 2021, in tandem with green shoots seen in several economic parameters.

However, the second wave of COVID reversed all the gains, and March and April witnessed around 23 million job losses, across both salaried and non-salaried segments.

Work resumption

According to Mint, the gradual easing of COVID-related restrictions by several states has allowed informal sector workers as well as small businessmen to resume work. However, the formal sector is yet to get back on its feet, it added. Its recovery would depend on a revival in demand, improvement in factory output and an overall economic recovery.

In an earlier release, the CMIE had said that while a quick recovery is expected in the informal jobs lost in the unorganised sectors due to the lockdowns across states, it would require a strong national economic recovery to boost the employment rate to 2019-20 levels.

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