Joblosses have pushed up India’s unemployment rate to 8% in April compared to 6.5% in March while the employment rate fell to 36.8% last month as against 37.6% in March.
Restrictions imposed by states due to the second wave of Covid-19 and the inability of the economy to absorb labour force resulted in a loss of 7.35 million jobs in April, pushing up the country’s unemployment rate to 8% compared with 6.5% in March, the Centre for Monitoring Indian Economy said.
According to the Centre for Monitoring Indian Economy, the labour participation rate fell for a third consecutive month in April to 39.98%, the lowest since May 2020 when the country was under a stringent nation-wide lockdown with 1.1 million fewer labour force in April compared to March.
Employment rate fell to 36.8% last month as against 37.6% in March.
“The lockdowns could have denied people from seeking employment and caused a fall in labour participation. But, the economy also could not provide adequate jobs to those who sought jobs,” the CMIE said in its weekly analysis. The report said job prospects would remain bleak in the ongoing fiscal 2022.
While the fall in the labour participation rate can be attributed to the partial lockdowns, the drop in employment cannot be, as most of the job losses were in the agricultural sector which was not impacted by the lockdowns, the CMIE said.
The data showed that out of the 7.35 million people who lost employment in April from the previous month, 6 million were from the agricultural sector.
“April is a lean month for employment in the farms as the rabi crop is harvested by then and preparations for the kharif crop usually begin only in May,” it said. The number of the employed in the agriculture sector was 114 million in April compared with around 120 million in March.
Daily wage labourers and small traders saw an employment loss of 0.2 million, while the job loss for salaried employees totalled 3.4 million.
“This was the third consecutive month of a decline in the coveted employment category of salaried workers,” it said.
As per the CMIE, the loss of salaried jobs during these three months totalled 8.6 million, while the cumulative loss of salaried jobs since the pandemic started last year was 12.6 million. India had 85.9 million salaried jobs in 2019-20. This has come down to 73.3 million in April this year.
The CMIE said salaried job losses were disproportionately from rural India — 68% in rural vs 32% in urban India. Urban India accounted for 58% of total salaried jobs in 2019-20, while rural salaried jobs accounted for 42%.
“This disproportionate share of rural salaried jobs in the losses indicates that the damage is mostly among the medium and small-scale industries that are located predominantly in rural India,” it said.
According to the CMIE, the second wave of Covid-19 has stalled economic recovery. “New investments that could create jobs in large numbers are unlikely to be made during the year,” it said, adding that prospects for jobs looked bleak during 2021-22.
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