As the employment rate continues to worsen amid the second wave of Covid-19, the Centre for Monitoring Indian Economy (CMIE) has said that the Indian labour market is in its worst condition since April-May last year, when the whole country was under lockdown.
Data published by CMIE showed that the unemployment rate, which reached 11.9 per cent in May 2021, continued to rise during early June.
The 30-day moving average unemployment rate as of June 6, 2021, was 13 per cent.
Further, the labour participation rate, which had fallen to 40 per cent, has fallen further to 39.7 per cent and the most important labour market indicator, the employment rate, which had fallen to 35.3 per cent in May, dropped to 34.6 per cent by June 6, 2021.
“The Indian labour market is in its worst condition since the nationwide lockdown months of April and May 2020,” CMIE’s CEO Mahesh Vyas said.
He noted that the last four weeks have seen a particularly sharp deterioration in labour market conditions.
Vyas, however, said that a quick recovery of the informal jobs that were lost in the unorganised sectors is expected because of the local lockdowns. But there is also a steady fall in employment independent of the lockdowns, he added.
The total non-farm jobs lost since January 2021 works out to 36.8 million. Of this, daily wage labourers account for 23.1 million. Salaried employees account for 8.5 million and the rest are entrepreneurs, as per CMIE.
It would take a strong recovery of the Indian economy to recover the remaining jobs or revert to the employment levels of 2019-20, he said.
“The unlocking process can be expected to repair about two-thirds of the job losses associated with the lockdown of May 2021. That would be 17 million out of the 25 million non-farm jobs lost during the month,” Vyas added.