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Employment scenario worsens in Dec
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SME Times News Bureau | 07 Jan, 2021
The employment scenario in the country, which improved post the lifting
of the lockdown, has worsened in December, according to data from the
Centre for Monitoring Indian Economy (CMIE).
The unemployment
rate in the country increased sharply to 9.1 per cent in December from
6.5 per cent in November, as per the data. The numbers indicate that the
stress in the economy is far from over and the road to normalcy would
be longer.
According to CMIE's MD and CEO Mahesh Vyas, the
December number is the highest unemployment rate since the beginning of
India's recovery from the lockdown in June.
He noted that the
rise in unemployment comes along with high inflation, which has been in
the vicinity of 7 per cent in recent months, and has made the situation
worse. He also raised concerns that the sharp increase in unemployment
strengthens worries regarding the recovery process.
As per the
think tank, the rise in unemployment in December is the result of a
partial recovery of the labour participation rate (LPR). The LPR had
fallen to 40 per cent in November from 40.7 per cent in the preceding
two months.
LPR is a measure of an economy's active workforce. It
is calculated by dividing the labour force by the total working-age
population.
In December, the LPR recovered partly, to 40.6 per
cent. The influx of people looking for work swelled and the labour force
increased from an estimated 421 million in November to 427 million in
December. But, labour markets were not ready for this six-million surge
in labour, leaving them largely unemployed, Vyas said.
CMIE
noted that the primary reason of the rise in unemployment in December
was the failure of the farm sector to absorb the influx of labour.
Farming is the last resort of many who are rendered jobless, but
December is not the suitable month for absorption of labour, it said.
This
is the month when farming sheds jobs. In each of the past five years
since 2016, labour employed in farming in December has shrunk compared
to November. In December 2019, the job loss from farming was 10 million.
In December 2020, this sector shed an estimated 9.8 million jobs,
showed the CMIE data.
As of December end, India had around 38.7
million unemployed people compared to 27.4 million in November,
registering a massive increase of 11.3 million. This huge increase
places the unemployed higher than it was before the lockdown.
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As on 13 Aug, 2022 |
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