Though the unemployment rate in May stood at the same as a month ago, the labour participation rate improved from 35.6% to 38.2% and the employment rate improved from 27.2% to 29.2%.
The partial lifting of the nationwide lockdown led to crores of people getting their jobs back in the month of May. In May alone, nearly 2.1 crore people got new jobs, however, the unemployment rate is still hanging at 23.5 per cent – much higher than pre-pandemic levels, according to CMIE. The rise in employment has brought cheer in the job market as the previous month saw a steep contraction in jobs. In April, the lockdown was strict and most of the businesses and industries were at a standstill. Consequently, the number of employed persons fell by around 11.4 crore.
Though the unemployment rate in May stood at the same as a month ago, the labour participation rate improved from 35.6 per cent to 38.2 per cent and the employment rate improved from 27.2 per cent to 29.2 per cent. India’s manufacturing industry was worrying that the distress caused to the migrant workers and labourers will develop scarcity of workforce in the industry, however, with the latest figures, the indications are that the workers who had left the labour markets in April returned in May.
However, even as the latest CMIE data has brought optimism in the job market, the IHS Markit report on manufacturing PMI revealed that the weaker demand in the market forced firms to cut staff numbers at a record pace since data collection began over 15 years ago. Lower production requirements saw Indian manufacturers continue to reduce worker numbers in May, the IHS Markit report added.
The distress caused by the coronavirus pandemic showed the unfortunate reality of the condition of the migrant workers. However, with a number of labour reforms and compensation by the centre and states, the sentiment across the workers are partially lifted, which has helped them come back to the job market. Meanwhile, it is still an unanswered question how much financial freedom do migrant workers have to not return to the job market.