Lockdown 2.0: Unemployment rate hits 26% in India, 14 crore lose jobs, says CMIE
The rate of labour participation has plunged to 35.4 % from 35.5 %. The employment rate has now dipped to 26.1 % as against 27 %
Amid coronavirus lockdown, unemployment rate has risen to 26.2 % in India in the third week of April, a report said.
Mahesh Vyas, Managing Director and CEO for Monitoring Indian Economy (CMIE), said, “extended lockdown is only expected to further hit the labour market conditions.”
"The employment rate has fallen from 40 % in February to 26 % now. This is a steep fall of 14 percentage points. This implies that 14 % of the working age population has lost employment. The working age population is of the order of a billion," Vyas wrote in an article on CMIE website.
It’s estimated that about 14 crore people have lost employment in the lockdown period, Vyas said.
Similarly, the rate of labour participation has plunged to 35.4 % from 35.5 %. The employment rate has now dipped to 26.1 % as against 27 % in the earlier week, he added.
“The labour markets are under equal stress both in rural and urban areas. The rate of unemployment in rural India stands higher at 26.7 % as against urban 25.1 %.”
"During the last week of March and in the first two weeks of April, the unemployment rate hovered around 23-24 %. In the first week, it was 23.8 %; in the second week it dropped a bit to 23.4 % but in the third week it bounced back to 24 %. The variations were minor and collectively they confirmed that the unemployment rate had indeed risen to around 24 % following the lockdown," Vyas said.
According to Vyas, volatility of the unemployment rate in urban India is also surprising. The unemployment rate in urban India surged to 30 and 31 %, respectively in the first and second weeks of the lockdown.
"Then, in the following two weeks it fell rather sharply to 23 and 25 %. This is a rather sharp fall in the unemployment rate in urban India although it remains quite elevated.”
The unemployment rate stood at 8.74% in March, highest since August 2016 when demonetisation happened, a recent report by CMIE said.
In August 2016, the unemployment rate was 9.59 %. While the unemployment rate was recorded at 9.35 % in urban areas, it stood at 8.45 % in rural parts of the country, the data also showed. In February, it was recorded at 7.78 %