Unemployment rate in urban India has been on the upswing since the beginning of the current month. From 7.21% on April 4, it jumped to 9.81% for the week ended April 11 and further to 10.72% for the week ended April 18, CMIE’s latest data showed.
This reflects a shift in the burden of job losses to urban India, reversing the trend of rural India largely bearing the brunt of Covid-induced strain on employment.
The overall unemployment rate was marginally down to 8.4% for the week ended April 18 compared with 8.58% a week ago. The rural unemployment rate, which had been on the upswing for the entire month of March — from 5.86% on March 7, it rose to 6.17% on March 14, 6.41% on March 21 and to 8.58% on April 4 — fell to 8% on April 11 and further to 7.31% on April 18.
Mahesh Vyas, MD & CEO, CMIE, recently told FE six million of the 10 million salaried jobs lost due to the pandemic — March level against the average of 2019-20 — were from the rural sector.
The rural sector workers have been hit because MSMEs and other industrial units are in trouble, he had said. In the absence of opportunities in companies and small establishments, there has been a shift of the labour force to the agriculture space, creating a fair bit of disguised unemployment, he noted.
Unemployment rate reached its peak for the week ended May 3, 2020 at 27.11%.
The strain on urban India is now intensifying, Vyas said, adding “we could see more livelihoods lost as states enforce more restrictions.” Half the factories in Maharashtra are either shut or on the verge of shutting down. Delhi on Monday decided to impose a week-long lockdown with effect from April 19 evening. Other urban centres may also announce such restrictions soon.
CMIE’s 30-day moving average unemployment measure, which is drawn from a fairly large sample, indicates joblessness which was 7% on April 11, has gone up to 7.4%, a fairly swift uptick in a short time.