Urban joblessness climbs to nearly 10%
UNEMPLOYMENT TOUCHED 8.6% FOR THE WEEK ENDING APRIL 11, FROM 6.7% TWO WEEKS AGO
NEW DELHI: India’s job market is facing the heat again with urban unemployment climbing to almost 10% following partial lockdowns in several states.
The job market, which was slowly recovering over the past few months, now looks to erase the gains and is poised for a tough time at least in the short run, new data pointed out.
According to fresh data from the Centre for Monitoring Indian Economy (CMIE), urban unemployment climbed to 9.81% in the week ended April 11 as against 7.72% in the week ended March 28 and 7.24% for the whole of March.
The sudden rise shows how the second wave of Covid-19 cases and ensuing partial restrictions in cities and urban centres are impacting the labour market. While India had reported around 70,000 new positive cases on March 31, the number on April 11 was almost 170,000.
The unemployment spike is not confined to just urban centres—the national unemployment rate and rural joblessness too have risen sharply in past two weeks, CMIE data shows.
While the national unemployment rate was 6.65% in the week ended March 28, it went up to 8.58% in the week ended April 11. Rural unemployment rose to 8% from 6.18% in the same period.
Economists said the hardest hit is the informal sector and, in the formal space, retail and hospitality. “When you put a night curfew or weekend restrictions, it’s the informal sector that gets impacted the most as they do sizeable business in the evening and on weekends. If the business is low, it’s very obvious that the manpower requirement will be low. The market or shop clusters get impacted, hampering jobs,” said Arup Mitra, a professor of economics at Delhi University.
“It’s a tough time in the labour market. 2020 was tough and as we were recovering, you now know that we are in the middle of a second wave. While the informal sector is getting impacted more, formal sectors like hospitality, retail and tourism have started showing the stretch due to covid restrictions. So, the job market observing a shrink is a direct outcome of this. Vaccination will be key to restricting the damage,” added K.R. Shyam Sundar, a labour economist.
“If the second reverse migration, which has started slowly, gains momentum, then you will see a tough time in rural labour market too,” he warned.
The Confederation of All India Traders claimed that in the past week alone, there has been a 30% business loss in retail markets due to state-level curbs.