Fresh lockdowns push India jobless rate to over 8% in first two weeks of April: CMIE

The imposition of fresh lockdowns has led to increase in unemployment rate to over 8% in the first two weeks of April and has the potential of impacting over 120 million unorganised workers besides hurting the economic recovery process, the Centre for Monitoring Indian Economy said.

“Frontline casualties of the uncertainties regarding a lockdown has started showing in the data.

The first two weeks that ended in April 2021 show an increase in the unemployment rate to over 8% and a fall in the labour participation rate to 40%,” CMIE said.

As per the CMIE data, unemployment rate in India stood at 7.2% with urban unemployment at 8.4% and rural unemployment at 6.6% as on April 14. The nationwide unemployment in March stood at 6.52% with urban unemployment at 7.24% and rural unemployment at 6.17%.

The unemployment rate, as per CMIE, has been rising since the first week of April after states started imposing stringent Covid-related restrictions and eventually paving way for partial or complete lockdowns.

“The lockdown will hurt urban employment in April or beyond if the lockdowns continue,” CMIE said in its weekly analysis. “Hopes of salaried employees returning back to office seem to have receded with the continued fall in salaried jobs and with the resurgence of the lockdown,” it said, adding this indicates that hopes of finding new decent jobs have faded.

According to CMIE, while the current lockdowns are expected to do less harm compared to the nationwide lockdown of 2020, this will hurt the recovery process which is still incomplete.

CMIE data shows labour participation in March 2021 was 40.2% compared to 42.7% in 2019-20, employment rate fell to 37.6% compared to 39.4% in 2019-20 and the unemployment rate stood at 6.5%, lower than the 7.6 per cent recorded in 2019-20.

As of March 2021, employment in India stood at 398 million, which is 5.4 million short of the 403.5 million employed in 2019-20 with the biggest loss among the salaried employees. CMIE estimates 9.8 million job losses in the salaried class with 76.2 million jobs as of March 2021 compared to 85.9 million salaried jobs in 2019-20.

Further, over six million salaried jobs were lost in rural India while nearly three million business persons were rendered unemployed as of March 2021, it said. This resulted in an increase of nine million jobs in rural India.

“So, the churn in rural India seems to have been people losing salaried jobs and losing their business and these unemployed people moving into agriculture for unproductive employment,” it concluded.