Pandemic Setback: ILO says India’s unemployment rate highest in 3 decades in 2020

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May 29, 2021 4:30 AM

According to the ILO database, India’s unemployment rate rose between 2008 (5.36%) and 2010 (5.65%), and then fell between 2013 (5.67%) and 2019 (5.27%). It then rose sharply to 7.11% in 2020.

Else, the country faces an employment problem that could get increasingly challenging with each year of delay.Else, the country faces an employment problem that could get increasingly challenging with each year of delay. (Representative image)

India’s unemployment rate – the share of labour force that is without work but available for it – rose sharply to 7.11% in the pandemic year 2020 to reach the highest level in at least three decades, according to the International Labour Organization’s (ILO) ILOSTAT database. For over a decade, India’s joblessness has been more acute than its immediate neighbours, while till 2009 Sri Lanka used to have a higher rate.

Though the methodology may not be strictly comparable, going by the Centre for Monitoring Indian Economy’s (CME) data for the subsequent period, the second Covid wave seems to have pushed India’s unemployment rate further and the current calender year could possibly see an even higher rate of joblessness in the country. Monthly unemployment rate of the country, as per CMIE, rose from 6.62% in January 2021 to 7.97% in April. Amidst lockdown and restrictions on mobility, the unemployment rate touched 14.5% in the week ended May 16, 2021, and rose further to 14.7% for the week ended May 23, according to CMIE.

As per Indian government’s periodic labour force survey (PLFS) data, country’s unemployment rate was 6.1% in 2017-18, a 45-year high. While that hogged headlines, the rate dipped to 5.8% in 2018-19, but is sure to have gone up to a much higher level in 2020-21. The National Statistical Office (NSO) has been conducting PLFS since April 2017 to estimate the key employment and unemployment indicators.

According to the ILO database, India’s unemployment rate rose between 2008 (5.36%) and 2010 (5.65%), and then fell between 2013 (5.67%) and 2019 (5.27%). It then rose sharply to 7.11% in 2020.

Globally, the average unemployment rate was 6.47% in 2020, up from 5.37% in 2019. In 1991, the average global unemployment rate was 4.8%.

Sri Lanka had the higher unemployment rate at 5.85% in 2009 compared with India’s 5.61%; but since then, the island nation has improved on the most important parameter of the labour market that gauges ability of an economy to generate employment.

In 2020, the unemployment rate of Bangladesh was 5.3%, 4.48% in Sri Lanka, 4.65% in Pakistan, 4.44% in Nepal and 3.74% in Bhutan, ILO said.

“When compared to the US, the UK and Germany, India had a higher unemployment rate than the other three between 2015 and 2019 but in 2020, the US had a higher unemployment rate than India,” Centre for Economic and Data Analysis (CEDA) said analysing the ILO data.

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