Unemployment rate has recovered to pre-COVID in India as unlock continues

Joblessness skyrocketed in April resulting in 14 crore job loss. However, In July the rate fell back down to the pre-COVID level

The COVID-19 pandemic has triggered huge unemployment across many countries. India also faced the hit of the pandemic economically due to the implementation of the world’s biggest lockdown. Started on March 25, lockdown continued for the next two months resulting in heavy job loss across many sectors.

However, in July, the joblessness has recovered to the pre-COVID level. Good monsoon increased the crop planting and unlock resumed economic activities, adding jobs back in the system. 

According to a survey by the Centre for Monitoring Indian Economy (CMIE), the unemployment rate rose to 8.75 percent in the country. In May, the rate continued to rise due to the lockdown. In June, the rate hit highest at 10.99 percent but it fell down to 7.43 percent in July.

Jobless lockdown

In the third week of April, the unemployment rose to 26.2 percent due to the lockdown forcing shutdown of operations in the country. The employment level has fallen from 40 percent in February to 26 percent in April. Reports also show 14 percent of people lost their jobs during the lockdown.

The participation in labour market has fallen due to the lockdown. The rate of labour participation in the country decreased to 35.4 percent from 35.5 percent. In rural India, the unemployment rate was higher than in the Urban part of the country. In the rural area, the rate stood at 26.7 percent while in the urban area it was at 25.1 percent.

The informal sector which employs 90 percent of the country’s workforce took the worst hit. After the lockdown was announced, migrant workers who are daily wage employees left cities and went to their villages. Migrant workers in agriculture also left to their villages in March during the harvesting period of the crop added to the job loss.

White-collar jobs also have to face the consequences of the lockdown. Companies in sectors such as media, retail, aviation, hospitality, and automobiles announced mass layoffs. Indian IT companies and start-ups also added to the unemployment rate. Ola, Curefit, Swiggy, and LinkedIn announced layoffs to constitute operations.

Total Job loss

Nearly 122 million people lost jobs in the country due to the COVID-19. Of which 91.3 million are small traders with shops in towns and urban cities. Nearly 17.8 million permanent employees lost jobs while 18.2 million self-employed people’s jobs were erased.

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 Job loss in restaurants, local shops, and roadside businesses (street vendors) skyrocketed during the lockdown. However, after June 8 these businesses restarted their operations hoping to recover the loss caused due to the lockdown.

State Wise data

Among the Indian state, Odisha state and Gujarat state. has the lowest unemployment rate of 1.9 percent in July. Followed by the tiny state Meghalaya at 2.1 percent. While the Haryana’s unemployment rate stood at 24.5 percent, highest in the country.

Delhi has the second-highest unemployment rate at 20.3 percent. Followed by Himachal Pradesh with a rate of 18.6 percent.

In rural India, the unemployment rate fell to 6.6 percent in July from 10.52 percent in the month prior. While in Urban India, the unemployment rate fell to 9.15 percent in July from 12.02 percent in June.

The decline in unemployment is attributed largely to good monsoon in 2020 and improved sowing in the rural parts of the country. Along with the unlock measure resumed economic activities in both rural and urban centers.

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