Total number of employed in India could breach the pre-Covid levels in October as consolidation in employment rates in the month so far could lead to marginal expansion in overall employment creation this month, forecast the Centre for Monitoring Indian Economy.

India added 8.5 million jobs in September taking the total number of employed to 406.2 million, which is 2.7 million short of 408.9 million employed in 2019-20.

Weekly data by CMIE shows the labour participation rate (LPR) stood at 41.6% in the week ended October 17 compared to 39.2% in the week ended October 3 and 40.4% for the week ended October 10. The unemployment rate, though higher than September, has seen a week-on-week decline in October. It stood at 7.3% in the week ended October 17 compared to 7.6% in the week ended October 3 and 8.9% in the week ended October 10.

“The week ended October 17 was remarkable as it saw an increase in the LPR and a simultaneous fall in the unemployment rate. This translated into an increase in the employment rate (ER) from 36.8% in the week ended October 10 to 38.5% in the week ended October 17,” CMIE said in its weekly analysis.

“The spurt in the labour participation rate and the employment rate give additional reasons to expect October to see a consolidation of the employment gains seen in September, or even a small expansion. The prospects of breaching the 2019-20 level are bright,” it added.

CMIE expects the labour participation rate to continue to rise in response to the current festival season and also because of the proximity to the harvest season.

CMIE’s optimism is also based on significantly higher non-agricultural growth in September which it said implies that it was not merely disguised unemployment and the fact that the growth in employment was more widespread and therefore sustainable.

“Finally, the increase in employment in construction and food industries seen in September is likely to be more sustainable than the gains seen in August which were essentially in personal non-professional services (which are largely poor quality jobs) and retail trade (which could not be sustained in September),” it added.

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