The unemployment rate in India has shot up in the first two weeks of April and the monthly unemployment rate is likely to be close to 8% compared to 6.5% in March with lower absorption of labour in the market, says the Centre for Monitoring Indian Economy.
As per CMIE data, unemployment rates in India in April stood at 8.2%, 8.6%, 8.4% and 7.4% in the first four weeks of the month. “The unemployment rate has dropped in the third and fourth week. Nevertheless, it is likely to be close to 8% during the month of April after closing March at 6.5%,”CMIE said in its weekly analysis.
CMIE says April could be the third consecutive month of deterioration in terms of employment rate. “The April markets seem incapable of absorbing the supply of labour at the labour participation rate of 40.2% and this could translate into a lower employment rate,” it said.
The employment rate had reached its highest post-lockdown level of 37.97% in September 2020. Then, it fell for three consecutive months but climbed back to 37.94% in January 2020 before declining again in February and March.
As per CMIE, there were 43.8 million people in India who were unemployed and were willing to work as of March 2021. Of these nearly 44 million people, nearly 28 million were actively looking for work and were unable to find any. The remaining 16 million were available for work but were not actively looking for work.
CMIE says this is a large pool of unemployed labour with the majority of them being young. Of the 44 million, 38 million are between 15 and 29 years of age. Half of them, around 22 million are in the early twenties.
“This number will have gone up in April because the LPR (which is a measure of the people seeking work) is expected to remain stable (on a rising population) and the unemployment rate is going up,” it said, adding April 2021 has seen sharply rising Covid-cases, severe shortages in the health services, rising deaths and also rising unemployment.