15.33 million lose jobs in May

NEW DELHI: At least 15.33 million Indians lost their jobs in May, erasing gains achieved since July 2020, a situation that may adversely affect consumer spending and economic revival. The number of people employed fell to 375.45 million in May from 390.79 million in April, according to the Centre for Monitoring Indian Economy (CMIE). In April and May, the number of people employed in salaried and non-salaried jobs fell by almost 23 million as the second wave of the pandemic infected millions of Indians, and states imposed lockdowns to stem the spread of the virus.

Fresh data also showed that the number of people unemployed but actively looking for jobs rose by 17 million to 50.72 million, reflecting the willingness to work but scarcity of opportunities.

The impact of the pandemic on salaried jobs is, however, relatively less, and largely limited to urban India. But people with businesses, small traders and daily wagers faced the brunt of the economic disruption caused by the pandemic.

While 127 million were employed in small trades and daily wage work in April, the number slumped to 110 million in the month of May. At least 9 million more people got engaged in farming activities in May, taking the total number of people employed in farming to 123.7 million. In contrast, 1.22 million salaried jobs were lost in urban India in May while rural India gained a little over 1.4 million salaried jobs.

“The job market was stretched since last year’s lockdown. The situation was looking up between December and March, but the second wave has done more damage. What we are not realizing is that the job loss is squeezing private demand. People losing jobs will impact revival. If the consumer does not have income, he or she won’t spend,” said Arup Mitra, a professor of economics at the Institute of Economic Growth.

“Non-farm opportunities have shrunk in rural India, and there is a surplus workforce there. People are getting engaged in farming, meaningful or not, is a separate debate. It also means more people are doing the same work, which means lower productivity and less income,” said Mitra.