A private research firm Centre for Monitoring Indian Economy (CMIE) new data on unemployment shows that India’s unemployment rate rose to a four-month high of nearly 8% in April. The data suggests that the unemployment increased to 7.97% from 6.5% in March with more than seven million jobs lost last month.
The CMIE Managing Director Mahesh Vyas told the reporters by telephone that there is a fall in the jobs available due to the lockdowns. He said “since the virus is still quite intense and we are stressed on the medical health-services front, it’s likely that the situation will remain tense in May as well.”
Vyas said it’s a double whammy for the economy following which Some people get disappointed and leave the labor market. He said the problem is the inability of the Indian economy to generate sufficient jobs for people who want them, so incomes are falling.
Last year in March 2020, Prime Minister Narendra Modi had announced a strict lockdown in the country to curb coronavirus that resulted in millions of job losses and a record contraction in economic output. Like last year lockdown, the local administrations have been forced to extend curbs as the nation’s creaky health infrastructure can’t cope with the flood of virus cases, threatening a nascent economic recovery.
The weak employment outlook is a risk for India’s chances of reaching double-digit economic growth this year. Many economists already have lowered their projections, while several are warning of possible reductions if provincial curbs are extended further.
The rise in unemployment comes amid a backlash against government handling of the world’s worst Covid-19 outbreak.
The CMIE data shows joblessness is more acute in urban areas as laborers return to their villages. The labor-force participation rate, which includes the number of people with jobs and those seeking work, declined to just below 40% in April.
The Covid-19 deaths in India hit a record 3,689 Sunday while the number of new cases slowed slightly Monday after India on Saturday became the first country to register more than 400,000 daily cases.