Phased unlock likely to restore 67% non-farm jobs lost since May: CMIE

The gradual unlocking process across India is likely to restore about two-thirds of the 2.5 crore non-farm jobs lost following the lockdown in May, according to the Centre for Monitoring Indian Economy (CMIE).

"This relentless loss of employment can be expected to abate somewhat in the coming weeks as many parts of the country that were under a lockdown have started announcing cautious relaxations.

"These could provide some succour to the daily wage labourers who have suffered during the calibrated and localised lockdowns of May 2021," CMIE's CEO Mahesh Vyas said in a report.

As these restrictions on movement are relaxed, these workers can be expected to return in search of employment, he added.

"We can expect a quick recovery of the informal jobs that were lost in the unorganised sectors because of the local lockdowns. But, there is also a steady fall in employment independent of the lockdowns," Vyas noted.

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The total non-farm jobs lost since January 2021 works out to 3.68 crore. Of this, daily wage labourers account for 2.31 crore, according to CMIE data.

Salaried employees account for 85 lakh and the rest are entrepreneurs. It would take a strong recovery of the India economy to recover the remaining jobs or revert to the employment levels of 2019-20, Vyas stated.

"The unlocking process can be expected to repair about two-thirds of the job losses associated with the lockdown of May 2021. That would be 1.7 crore out of the 2.5 crore non-farm jobs lost during the month," the report said.

As per CMIE data, the unemployment rate that reached 11.9 per cent in May, continued to rise into early June.

The 30-day moving average unemployment rate as of June 6 was 13 per cent.

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The Indian labour market is in its worst condition since the nationwide lockdown months of April and May 2020, Vyas added.

He mentioned that the last four weeks have seen a particularly sharp deterioration in labour market conditions.

"The downturn began in the week ended May 16. During this week, the labour participation rate was at 40.5 per cent, which was higher by a whisker than the average 40.4 per cent rate around which this ratio has been hovering for several months since the 2020 lockdown," he noted.

But the unemployment rate shot up suddenly to 14.5 per cent after remaining stable for several weeks at around 8 per cent.

This implies that during this week of May 16, a number of people lost employment suddenly and they continued to look for jobs, albeit unsuccessfully, he pointed out.