According to the Centre for Monitoring Indian Economy (CMIE), 10 million people have lost jobs in the month of May. The unemployment is rising as the second wave of COVID-19 pandemic ravaging the country.
The second wave of coronavirus has shattered the dreams of early and fast economic recovery. The government was expecting that economy will grow at higher rate and add more jobs as the result.
The second wave of COVID-19 pandemic not only created health crisis of worst kind but also made the already existing economic crisis much worse. The job scenario in India is set to worsen a great deal as the nation once again is faced with double-digit unemployment rate.
The youth unemployment has also increased. The youth unemployment was higher even before the COVID-19 pandemic struck India last year. The 60 % of the educated youth in the 20-24 age groups was unemployed before the coronavirus pandemic. The young people with higher education have become unemployed in recent period.
Among urban men, the 20-24 age group accounts for 13.5 per cent of the working age population, but 60 per cent of the unemployed. In addition to rising open unemployment among the higher educated, the less educated, mostly informal workers have also seen job losses and reduced work opportunities since 2016.
The data-analysts have pointed out that the data on women in urban areas show that graduates are 10 per cent of the working age population, but 34 per cent of the unemployed.
Youth today are much better educated than their parents. According to the 2015 Employment-Unemployment Survey of the Labour Bureau, workers with no formal education at all are now 12 per cent of the labour force.
The enrolment rate for secondary education reached 90 per cent in 2015. The enrolment rate for higher education in the 18-23 age group rose to 26 per cent in 2016 from 11 per cent in 2006.
May 2021 is going to see unemployment rate in India deteriorate even with limited restrictions in place on account of the second wave of COVID-19 infection, much lenient in comparison to the nationwide lockdown seen during the first wave.
CMIE CEO Mahesh Vyas has said that “the only time the unemployment rate lurched into double-digits was when India was shut down by a stringent 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.”
India will close May with double-digit unemployment rate, falling employment rate and substantial loss of employment, he cautioned.
In the weeks ended May 16 and May 23, unemployment rate had reached 14.5 per cent and 14.7 per cent, way higher than 8.7 per cent seen in the week ended May 8. “Gleaning the weekly rates during the current month, it seems that May 2021 could end with an unemployment rate of over 10 per cent,” Vyas said.
Worryingly, unemployment rate has been growing in both urban as well as rural regions, as opposed to the usual trend where urban unemployment rate is much higher that the rural unemployment rate.
“Urban unemployment entered the double-digit zone on May 6 when its 30-day moving average rate was 10.2 per cent. It has risen steadily since then. By May 20 it touched 12 per cent and as of May 23 it was 12.7 per cent,” Vyas said.
In contrast, rise in rural unemployment rate is a more recent phenomenon that began in May. “During April, the unemployment rate rose from 6.2 per cent as of April 1 to 7.1 per cent by May 1. Then, it fell to 6.7 per cent by May 7 before it began its steep rise. By May 23 it reached 9.7 per cent,” Vyas wrote in his report.
The loss of employment is also evident in the steady fall in the employment rate during May 2021, Vyas stated. The employment rate was 36.8 per cent in April 2021, whereas 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, he said.
Employment has been falling since January 2021 and has seen a 10 million decline between January and April 2021. May 2021 could see a similar fall, Vyas warned.
India’s unemployment rate sharply rose to 7.11 per cent in 2020 from 5.27 per cent in 2019; the United States and Brazil showed higher unemployment rates in comparison to India.
India’s unemployment rate rose to its highest level since 1991 during 2020 as coronavirus pandemic caused economy to come to a screeching halt, according to a study. The nation saw one of the toughest lockdowns in the world starting March last year as the pandemic claimed numerous lives, with stringent restrictions on mobility and economic activities across the board.
India’s unemployment rate sharply rose to 7.11 per cent in 2020 from 5.27 per cent in 2019, said a report by Centre for Economic Data and Analysis (CEDA) based on the ILOSTAT database of International Labour Organisation. Going back, India saw its unemployment rate rise between 2008, when it was 5.36 per cent to 5.65 per cent in 2010. It maintained a downward trend between 2013 and 2019, when it came down from 5.67 per cent to 5.27 per cent.
The study also surveyed eight other countries, including Bangladesh, Pakistan, Sri Lanka, China, Russia, Brazil, United States, United Kingdom and Germany. India displayed the highest unemployment rate as compared to its closest neighbours, with China at 5 per cent, Bangladesh at 5.3 per cent, Pakistan at 4.65 per cent and Sri Lanka at 4.84 per cent.
India also registered higher unemployment rate compared to United States, United Kingdom and Germany between 2015 and 2019, the report said. However, the US had higher unemployment rate as compared to India in 2020 (8.31 per cent). United Kingdom and Germany had unemployment rates of 4.34 per cent and 4.31 per cent, respectively.
The only other nation after the US to display a higher unemployment rate than India was Brazil. The South American nation saw a substantial rise in unemployment between 2014 (6.66 per cent) and 2020 (13.67 per cent).
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