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India’s unemployment rate rises, 1.5 crore jobs lost in May

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  • Economy shrinks further amid second wave of Covid-19; unemployment rate goes from 7.7% in April to 11.9% in May 2021, as per CMIE data

#New Delhi

If the unemployment scenario in India was bad last year, it has become worse this time. According to a survey conducted by the Centre for Monitoring Indian Economy (CMIE), in just one month the unemployment rate in the country went from single digit to double-digit figure, marking a rise of 4 per cent. Around 1.5 crore people lost their jobs in May this year. As per the data, the unemployment rate in May was 11.9 per cent, significantly higher than the 7.7 per cent in April.

The pandemic has wreaked a havoc on the economy of the country. Several businesses had to shut down, leaving employees high and dry. At the end of the first wave, savings had been exhausted. Migrant labourers and those in the unorganized sector were the worst sufferers. The salaried class saw massive job cuts and salary cuts.

But the improvement in the Covid-19 situation brought hope that the economy would start returning to normalcy. Far from it, the second wave crippled it further. Barely getting over the effects of the first total lockdown, the economy was once again hit when Covid-19 cases saw a sudden surge in April this year.

In the 12 months between June 2002 and May 2021, the lowest unemployment rate was 6.5 per cent in November last year and in March this year, according to the CMIE data.

In May, the unemployment rate in urban areas was 14.73 per cent, while it was 10.63 per cent in the rural areas. In the past 12 months, the lowest rate in urban areas was 6.99 per cent in February this year and 5.81 per cent in rural areas in January.

In April last year, the unemployment rate was as high as 23.52 per cent, thanks to the lockdown because of which many people lost their jobs.

According to the CMIE data, around 37.545 crore people had a job in May 2021. This figure was 39.079 crore in April, indicating a loss of 1.53 crore in just a month.

Sources say that the fear of getting infected as well apprehensions due to inadequate vaccination has resulted in drop of labour force participation rate (LFPR) which is a measure to evaluate the working-age population of an economy. On the other hand, unemployment rate assesses the population in the labour force that is currently without a job.

It is believed that the economy activity and employment may increase once states lift the lockdown to a greater extent. However, that might be temporary.

 

 

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