Unemployment rate shoots up to 8% in April as lockdowns spread
NEW DELHI: As the severe second wave of Covid-19 and the resultant lockdowns bring economic activities to a halt, India's job scenario worsened in April 2021.
As per data published by the Centre for Monitoring Indian Economy (CMIE), India's unemployment rate rose 8% in April, against 6.5% in March.
"April 2021 turned out to be worse than expectations. We had expected labour participation rate to stabilise at its March 2021 level. The LPR had dropped sharply in March already after a modest fall in February. But, the LPR fell for a third consecutive month in April," CMIE's CEO Mahesh Vyas said.
It fell to 39.98% -- the lowest LPR since May 2020, the month of a stringent nation-wide lockdown. The LPR in April 2021 is therefore the worst since the national lockdown, the CMIE said.
It attributed this fall is the result of the local lockdowns in several states. In Maharashtra, a state that imposed partial lockdowns, saw its LPR fall sharply from 44.2% in March to 40.6% in April.
The labour force shrank by 1.1 million in April 2021 to 424.6 million compared to 425.8 million in March. In spite of this smaller labour force looking for employment, a greater proportion failed to find employment.
The employment rate fell from 37.6% in March to 36.8% in April.
Vyas noted that the lockdowns could have denied people from seeking employment and caused a fall in labour participation, but, the economy also could not provide adequate jobs to those who sought jobs.
"So, the strain in the labour markets was not entirely because of the partial lockdowns. It was largely because the economy simply could not provide employment to large numbers who sought work," he added.
While the labour force shrank by 1.1 million in April, the count of the employed fell by a much larger 7.35 million, as per CMIE data.
It noted that salaried job losses were disproportionately located in rural India. While urban salaried jobs accounted for 58% of total salaried jobs in 2019-20, they accounted for only 32% of the job losses till April 2021.