India’s unemployment rate stabilises; people come back looking for work as lockdown curbs ease

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May 20, 2020 2:37 PM

Unemployment rate in India has remained stable at 24% during the week ended May 17, the same as it was in the preceding month of April.

unemployment, employment, LPR, labour participation rate, CMIEUnemployment in India stood at 6.7%, according to CMIE, before it shot up to 24% by March 29.

Unemployment rate in India has remained stable at 24% during the week ended May 17, the same as it was in the preceding month of April. The gradual relaxations in the nation-wide lockdown since April 20, are not proving to have any significant positive impact on the unemployment rate, said Centre for Monitoring Indian Economy (CMIE). The data gathered highlighted that the relaxations have had an impact on labour participation. “This (labour participation) has bounced back from its lowest level of 35.4% in the week ended April 26. In the next week ended May 3, it scaled back to 36.2%. And then, shot up smartly to 37.6% in the week ended May 10 and now, in the latest week of May 17 it increased to an even better 38.8%,” it said.

Unemployment in India stood at 6.7%, according to CMIE, before it shot up to 24% by March 29, as the government asked citizens to sit home to tackle the deadly coronavirus pandemic. Labour demand is likely to surge with transport facilities being made available now to take migrant labourers back. “But, the much belated return of a much harrowed migrant labour to their homes is likely to complicate, significantly, the re-starting of the economy post the ever elusive lifting of the lockdown. Uncertainty continues to prevail,” it said. 

India has been witnessing a large mass-movement of migrant labourers who started walking back to their native place citing lack of work in big cities, making it difficult for them to survive and pay for a roof over their heads. “A persistently high unemployment rate indicates that a large proportion of labour that is willing to work is unable to find jobs. And, the sharp fall in labour participation rate indicates that lesser people are willing to work,” CMIE said. The think tank said that the government’s allocation towards rural employment could make a ‘small impact’.  MGNREGA is expected to generate 3 billion person days of jobs in 2020-21. 2.65 billion person days of jobs were created from the Rs.710 billion allocated to the scheme in 2019-20, it said.

CMIE, that has been producing economic and business databases since 1976 said that urban India’s unemployment rate stood at 27%, whereas that of rural India stood at 23%. With this CMIE said that the economy would take longer to recover. A persistently high unemployment rate indicates that a large proportion of labour that is willing to work is unable to find jobs. And, the sharp fall in labour participation rate indicates that lesser people are willing to work.

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