The second wave of COVID has been as destructive for the economy, if not more, than the first one, going by key parameters. According to the Centre for Monitoring Indian Economy (CMIE), a privately held Mumbai-based think-tank, about 15 million (or 1.5 crore) Indians lost their jobs in May. The urban joblessness rate reached 18% in the week ended May 30, marking the steepest rise over the past year.
These numbers add to concerns about the perilous state of the economy indicated by other parameters. It has been announced that the nation’s GDP fell 7.3% in fiscal 2020-21. Also, for May, auto sales declined across various segments, and the Manufacturing PMI (Purchasing Managers’ Index), an indicator of factory activity, tumbled to 50.8.
Fourth months of fall
“Employment fell from 390.8 million in April 2021 to 375.5 million in May 2021. This translates into a loss of 15.3 million jobs, or a 3.9% fall in employment in the month,” said Mahesh Vyas, MD and CEO of CMIE. “May 2021 is also the fourth consecutive month of a fall in employment. The cumulative fall in employment since January 2021 is 25.3 million. Employment in January 2021 was 400.7 million. This has dropped to 375.5 million,” he added.
— CMIE (@_CMIE) June 1, 2021
As result of the second wave of COVID, which led to lockdowns in most parts of the country, April and May were particularly impacted. India lost 25 million non-farm jobs in those two months alone, it has been noted. “It is possible some of these jobs will come back quickly when the lockdown conditions are eased. But it is a reflection of the high informality and therefore the correspondingly high vulnerability of labour that is employed informally in India,” said Vyas.
“The employment rate fell to 35.3% per cent in May 2021 from 36.8% in April 2021,” said Vyas. “This is a very sharp fall for a single month. Except for the precipitous fall in the employment rate in April 2021 in the face of a nationwide lockdown, the employment rate has never dropped by 1.5 percentage points or more in any month in the past. May 2021 was therefore a particularly stressful month on the jobs front.”
He further noted that the May 2021 fall in employment was even greater than the 12.3 million decline seen in November 2016, the month of demonetisation.
There were not too many job losses among people in the 15-29-year age group. The age group of 30-39 years saw a loss of 5.9 million jobs and that of 40-plus saw a loss of 18.7 million jobs. Most of these were borne by men.
Jobs in the rural sector have revived better, it has been indicated. For the week ended May 30, rural unemployment rate stood at 9.6%, against 13.5% in the week ended May 23.