Jobless rate in urban India soars to 18%
DELHI: India’s urban unemployment rate has soared to almost 18%, the highest in a year, as lockdowns and curtailed economic activity continued to hit the jobs environment.
The urban joblessness rate was 17.88% in the week ended May 30, three percentage points more than a fortnight ago, when the unemployment rate was at 14.71%, the Centre for Monitoring Indian Economy (CMIE) data showed. If one considers weekly data for May, urban unemployment rose from 10.08% in the week ended May 2 to almost 18% in the week ended May 30 .
The labour force participation rate (LFPR) and employment rate also fell n urban India. FPR dropped to 35.69% in the week ended May 30, against 37% in the week ended May 16, the CMIE data showed. However, rural unemployment fell four percentage points in the week ended May 30, from a fortnight ago, to 9.58%.
National joblessness dropped a little over two percentage points during the same period. As per the latest weekly data, the national unemployment rate stands at 12.15%
Experts and economists said urban joblessness has a direct co-relation with restrictive economic activity and lockdowns. Besides, there is no alternative to the rural national employment guarantee scheme for urban workers. They said that in rural India, more people are engaged in family professions, leading to disguised unemployment and less productivity.
“Urban unemployment will stay high for at least three to six months because of three reasons–lack of employment opportunities, employers hesitation to hire more, and an increased risk aversion among workers due to the scientists’ study that has established that the coronavirus is spreading through air,” K.R. Shyam Sundar, a labour economist, said.
“Other than IT and allied sectors, employment opportunity is limited everywhere else. Look at fast-moving consumer goods, retail trade, automobile, informal sectors, including urban markets, the hospitality or tourism sectors, you would realize that it’s no time to stand and clap in joy. The business sentiment is down, consumption is down, and we are facing a circular crisis,” he added.
The Federation of Indian Chambers of Commerce and Industries (Ficci) on Monday said business confidence has dipped to a three-quarter low and 70% of participants reported weak demand as a matter of concern, compared to 56% articulating similar sentiment in the previous survey.
The fall in demand is due to declining income, and job and business losses, and their impact on the overall economy, said Arup Mitra, a professor of economics at Delhi University. “Because there is a stretch in the labour market, people have reduced pay and job losses are massive, market demand and economic revival is taking time. I think the improvement in job market and business sentiment will depend on how we as a system manage the current crisis.”
Mitra also said that since March 2020, the employment market is facing an unprecedented time.