New Delhi: India’s unemployment rate has spiked to 14.7% in the week ended May 23, the highest since June 2020, according to Centre for Monitoring Indian Economy (CMIE) data.
Urban employment rose to 17.4% during the same period compared with 14.7% in the prior week, while rural unemployment eased to 13.5% compared with 14.3% in the prior week.
Unemployment rate shot up to 8% in April compared with 6.5% in March, while the employment rate fell from 37.6% in March to 36.8% in April, CMIE data showed. The unemployment rate had peaked to 23.5% in April 2020 and remained at 21.7% in May.
The estimated weekly unemployment rate post mid-June 2020 remained in single digits, and suddenly spiked from 8.67% in the week ended May 9 to 14.4% in the week ended May 16, and 14.7% in the last week.
According to analytical reports, the jobless rate will continue to further rise in May because of curbs on mobility due to statewide lockdowns to prevent the spread of the coronavirus infection.
The Times of India quoted Mahesh Vyas, managing director and CEO of CMIE, as saying: “The only time the unemployment rate lurched into double-digits was when India was shut down by the nationwide lockdown during April and May 2020. There is no similarly draconian lockdown now although there are several local restrictions that restrain mobility in varying but distinctly milder degrees. The double-digit unemployment rate seen in recent times indicates that even these restrictions are taking a toll on the economy.”
Vyas told TOI that 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%. By May 1, it had reached 9.6% and then by May 23 it was 12.7%.”
Calling the rise of unemployment in rural India a recent phenomenon, and the weekly double digit rural jobless numbers worrying, he added: “Employment in rural India in April received substantial support from the Centre’s MGNREGS.”
Also read: Additional 230 Million Indians Fell Below Poverty Line Due to the Pandemic: Study
The labour participation moderated to 39.4% from 40.5%, BloombergQuint reported, citing a research note by Nomura. The Nomura India Business Resumption Index (NIBRI) – a weekly tracker of the pace at which the economic activity normalises – is at 60 for the week ended May 23, from 63 the previous week. This is 40 percentage points below the pre-pandemic levels and suggests that the worst hit to activity will occur in May, the report noted, quoting economists Sonal Verma and Aurodeep Nandi of Nomura.
According to a Mint report, which analysed the reduction of white-collar jobs, India’s white-collar workforce is down by 4.3 million since April 2020. In April 2020, India had about 18.1 million white-collar workers. By April 2021, the number fell to 13.8 million, the report said.
The report cited data from the Monster Employment Index saying there has been a decline in entry-level job postings too. In April, the job postings declined by 5% compared with March. In a normal year, April-May of 2019, hiring had risen 4%.
