New Delhi: The Indian labour market has fallen to its worst condition while the country was struggling with the second wave of Covid-19. "The market is in its worst shape since April-May 2020," said the report by the Centre for Monitoring Indian Economy (CMIE), a business information company.
The report also noted the worsening employment rate. The unemployment rate had declined to 11.9% in May 2021. It has moved up to 13% in June. But, the labour participation rate has fallen further from 40% to 39.7%.
"The last four weeks has seen a sharp downturn," added Mahesh Vyas, CEO of CMIE. The most important indicator of the labour market, the employment rate, fell to 35.5% in May. It further deteriorated to 34.6% in the first week of June. He also pointed out that there is a fall in employment unrelated to the lockdowns.
The data shared by the CMIE says that 36.8 million non-farm jobs were lost in the last five months and about 23.1 million of them are daily wage labourers and 8.5 million are salaried employees. The rest of the job loss happened to entrepreneurs.
The CMIE has speculated on a quick recovery in the unorganised sector. CEO Vyas said that informal jobs lost in the past weeks are likely to revive due to the local lockdowns. "The unlocking process may repair about two-thirds of the job losses associated with the lockdown of May 2021," he added. That is 17 million non-farm jobs out of 25 million lost jobs.
"The Indian economy needs a strong revival to lead to the recovery of lost jobs and to get back to the previous employment levels of 2019-2020," said the CMIE CEO.
The monthly economic report of June by the Finance Ministry had said that the fiscal measures planned in the Union Budget will play a key role in invigorating the investment cycle in the upcoming quarters.