New Delhi: With the pandemic-battered situation improving in the Indian states because of easing of the Covid-19 related restrictions, the unemployment rate has fallen in the country, in what is seen as a good sign for the economy to recovery soon.
The second wave of Covid-19, more devastating than the first in terms of human suffering, had adversely impacted jobs and household incomes in the months of April and May. Despite this, the government carefully avoided a national-level lockdown which had wreaked havoc in Indian economy last year.
The weekly unemployment rate, which fell to 10 percent in May, has improved to 8.7 percent now, media reported on Tuesday.
With the onset of monsoon, rural employment has witnessed a better recovery compared to urban areas. The rising unemployment has also stopped due to the relaxation of Covid-19 restrictions, allowing the informal sector to resume operations after a two-month closure.
Data from the Mumbai-based think tank Centre for Monitoring Indian Economy (CMIE) suggests that urban unemployment dropped to 9.7 per cent in the week ended June 13, compared to the monthly urban unemployment rate of 14.7 per cent in May.
The drop seems more prominent when compared to the near 18 percent unemployment rate recorded in the week ended May 30.
However, the employment recovery seems to be better in rural India, where the rate has dropped to 8.23 percent in the week ended June 13, compared with the monthly rural unemployment rate of 10.63 percent.
Despite the recovery, unemployment is still higher compared to the months between January and April, when it remained much lower at 6.5 percent to 7.9 percent. The unemployment rate fell during these months as there was a broad-based recovery in jobs across most sectors, including salaried employment.
The rise in the unemployment rate during the second wave has been much lower compared to the sharp increase during the first wave of the Covid-19 pandemic in 2020. In April 2020, the national unemployment had reached a record high of over 23.5 per cent.
While the second wave has not claimed as many jobs, it has severely impacted the country’s informal sector employees between April and May.
There has been a gradual improvement in the employment rate since state governments started easing lockdown norms, but experts are worried about the formal sector that may recover only when demand returns.
(VP)
