India's unemployment rate hits 26% amid lockdown, 14 crore lose employment: CMIE
BusinessToday.In April 22, 2020
India's unemployment rate rose to 26.2 per cent in the third week of April amid coronavirus lockdown, a report said. The extended lockdown is only expected to further hit the labour market conditions, Mahesh Vyas, Managing Director and CEO, Centre for Monitoring Indian Economy (CMIE), said. "The employment rate has fallen from 40 per cent in February to 26 per cent now. This is steep fall of 14 percentage points. This implies that 14 per cent of the working age population has lost employment. The working age population is of the order of a billion," Mahesh Vyas also said in an article on the CMIE website. Fourteen crore people are expected to have lost employment in the lockdown period, he said. Similarly, the rate of labour participation has plunged to 35.4 per cent from 35.5 per cent. The employment rate has now dipped to 26.1 per cent as against 27 per cent in the earlier week, it added.
The labour markets are under equal stress both in rural and urban areas, he added. The rate of unemployment in rural India stands higher at 26.7 per cent as against urban 25.1 per cent. "During the last week of March and in the first two weeks of April, the unemployment rate hovered around 23-24 per cent. In the first week, it was 23.8 per cent; in the second week it dropped a bit to 23.4 per cent but in the third week it bounced back to 24 per cent. The variations were minor and collectively they confirmed that the unemployment rate had indeed risen to around 24 per cent following the lockdown," Mahesh Vyas further said.
The volatility of the unemployment rate in urban India is also surprising, he said. The unemployment rate in urban India surged to 30 and 31 per cent, respectively in the first and second weeks of the lockdown. "Then, in the following two weeks it fell rather sharply to 23 and 25 per cent. This is a rather sharp fall in the unemployment rate in urban India although it remains quite elevated," the report said.
Meanwhile, the unemployment rate stood at 8.74 per cent in March, highest since August 2016 when demonetisation happened, a recent report by CMIE said. In August 2016, the unemployment rate was 9.59 per cent. While the unemployment rate was recorded at 9.35 per cent in urban areas, it stood at 8.45 per cent in rural parts of the country, the data also showed. In February, it was recorded at 7.78 per cent.