COVID effect: 22 million jobs were lost in just two months, says CMIE

India's umployment rate went up to 11.9 per cent in May during the peak of the second wave

Urban employment in India is still high at 10.07 percent while the rural unemployment rate was 8.75 percent

More than 22.7 million jobs losses were reported in April and May 2021, according to the Centre for Monitoring Indian Economy (CMIE). These job losses were mostly due to the lockdown imposed in several states.

Though India’s unemployment rate fell to 9.17 per cent in June after a spike to 11.9 per cent in May, the rate is still high as in April it was 7.97 per cent. According to CMIE, in June 2021, though the urban unemployment rate fell, it still remained high at 10.07 per cent, compared with 14.73 per cent in May. The rural unemployment rate in June stood at 8.75 per cent from 10.63 per cent in May. May 2021 was only the fourth month since at least January 2016 when the overall unemployment rate breached the double-digit mark.

A total of nine states and UTs have double-digit unemployment rates. Puducherry tops the list of unemployment rate with 47.1 per cent at June end, i.e., nearly half of the working population remained jobless in the Union Territory (UT). Puducherry is followed by Haryana, which has an unemployment rate of 27.9 per cent. All Southern states, except Kerala, have single-digit unemployment rate. The unemployment rate of Kerala is 15.8 percent.

Tamil Nadu’s unemployment rate has declined from 28 per cent in May to 8.3 per cent in June and still, the rate is high.

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Also read: Tamil Nadu’s unemployment rate shoots up as state locks down for COVID

“Tamil Nadu has a large number of MSMEs which provide employment to lakhs. This section of society has been hit badly due to the lockdown and many were shut down and all those who are employed in these factories were without jobs. As the number of active cases declined, the government announced relief to areas that had less number of fresh cases. Industrial areas in Chennai and nearby districts were opened which lead to more people getting jobs,” said a senior official.

“The urban unemployment rate has been on the rise since early April 2021. On April 1, the 30-day moving average urban unemployment rate was 7.2 per cent. By May 1, it had reached 9.6 per cent and then by May 23 it was 12.7 per cent. In contrast, the rise of unemployment in rural India is a more recent phenomenon,” said CMIE CEO Mahesh Vyas.

“We see evidence of loss of employment in the steady fall in the employment rate during May 2021,” said Vyas.

Also read: Lockdown impact: Every fourth person in India is unemployed

“The employment rate was 36.8 per cent in April 2021. The 30-day moving average employment rate on May 23 was 35.8 per cent. This 100-basis point fall in the employment rate translates into a fall in employment of the order of 10 million. This would be much more than the 7.35 million drop in employment recorded in April 2021. Employment has been falling since January 2021. It had fallen by about 10 million between January and April 2021,” said Vyas.

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