Following partial lockdowns in many states, India’s labour market is once again heating up, with urban unemployment rising to nearly 10 percent. According to a new data, the job market, which had been steadily improving in recent months, now appears to be erasing progress and is set to have a difficult time in the short term.
According to new data from the Centre for Monitoring Indian Economy (CMIE), urban unemployment rose to 9.81 percent in the week ending April 11, up from 7.72 percent the week before and 7.24 percent for the month. The sharp increase demonstrates how the second wave of Covid-19 events, as well as the resulting partial restrictions in cities and metropolitan areas, are affecting the labour market. On March 31, India announced about 70,000 new positive cases; on April 11, the number had risen to nearly 170,000.
According to CMIE reports, the unemployment spike is not limited to urban areas; the national unemployment rate and rural unemployment have also increased significantly in the last two weeks.
The national unemployment rate rose to 8.58 percent in the week ending April 11 from 6.65 percent in the week ending March 28. In the same time, rural unemployment increased to 8 percent from 6.18 percent. The informal sector, as well as retail and hospitality in the formal space, are said to be the hardest hit by economists.
“When you impose a night curfew or weekend limits, the informal sector is the hardest hit since they do a lot of business in the evenings and weekends. It goes without saying that if business is slow, manpower requirements would be limited. Market or shop clusters are harmed, putting jobs at risk,” said Arup Mitra, an economics professor at Delhi University.
“The labour market is in a rough spot right now. 2020 was a difficult year, and as we recovered, you might have noticed that we are now in the midst of a second wave. Although the informal sector is being disproportionately affected, formal sectors such as hospitality, retail, and tourism have begun to feel the pinch as a result of covid restrictions. As a result, the work market has shrunk as a result of this. Vaccination would be critical in limiting the harm”, according to labour economist K.R. Shyam Sundar.
“If the second reverse migration, which has been slow to gain traction, then you will see a difficult time in the rural labour market as well,” warned Sundar. The Confederation of All India Traders said that state-level curbs have resulted in a 30 percent drop in business in retail markets in the last week alone.
