News: India’s unemployment rate could hit double-digit mark in May: CMIE

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India’s unemployment rate could hit double-digit mark in May: CMIE

The country is staring at an estimated 10 million job losses in May, much higher than April.
India’s unemployment rate could hit double-digit mark in May: CMIE

The job scenario in India is set to take a turn for the worse. India’s unemployment rate could be over 10 percent with an estimated 10 million job losses in May, much higher than April, despite a softer degree of restrictions due to local lockdowns, as per the Centre for Monitoring Indian Economy.

Mahesh Vyas, CEO of CMIE stated, “The only time the unemployment rate lurched into double-digits was when India was shut down by a stringent nationwide lockdown during April and May 2020. There is no similarly draconian lockdown now although there are several local restrictions that restrain mobility in varying but distinctly milder degrees. The double-digit unemployment rate seen in recent times indicates that even these restrictions are taking a toll on the economy." 

As per CMIE, the only time the unemployment rate hit double-digits was when India was shut down by a stringent nationwide lockdown during April and May 2020.

“There is no similarly draconian lockdown now although there are several local restrictions that restrain mobility in varying but distinctly milder degrees,” it said.

It further added, “The double-digit unemployment rate seen in recent times indicates that even these restrictions are taking a toll on the economy.”

As per CMIE, the high degree of unemployment rate in May could be on the back of a higher number of job losses in the month as the labor participation rate has remained unchanged. The unemployment rate stood at 7.97 percent in April while the fall in employment in April was 7.35 million. The data shows the unemployment rate was higher at 14.7 percent for the week ended May 23 compared to 14.5 percent in the week ended May 16, 2021, and 8.7 percent in the week ended May 9. A 100 basis point fall in employment rate from 36.8 percent in April to 35.8 percent on May 23 would mean a fall in employment of the order of 10 million.

In addition, the unemployment rate has been rising in both rural and urban regions. While the urban unemployment rate stood at 12.7 percent on May 23 the rural unemployment rate was 9.7 percent compared to 7.1 percent on May 1.

Given that the average unemployment rate in rural India has been around 6 percent in recent years and the monthly unemployment rate touched 8 percent rarely in rural India before the lockdown, this 9.7 percent rate does not bode well for the economy.

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Topics: Recruitment, #Jobs, #Hiring

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