Initial estimates of job data show that the coronavirus pandemic could have caused unemployment to rise to 23.4 percent, the Centre for Monitoring Indian Economy (CMIE) stated.
The business information company tracks unemployment data on a weekly basis. According to its estimates, unemployment has risen from 8.4 percent in the week ended March 22 to 23.4 percent as of the week ended April 5.
The nationwide lockdown to contain the spread of COVID-19 began on March 24. Many states had imposed a lockdown in some districts even before the nationwide lockdown was announced.
In the week ended March 29, the unemployment rate had shot up to 23.8 percent, according to CMIE data.
India's employment rate plunged to a record low of 38.2 percent in March 2020, the CMIE added, calling it a "precipitous fall".
"The fall since January 2020 is particularly steep - almost spectacular. It seems to have nosedived in March after having struggled to remain stable over the past two years," the CMIE said about the employment rate.
"Labour statistics for March 2020 are worrisome. And, those for the past two weeks are much worse," wrote Mahesh Vyas is Managing Director and CEO of Centre for Monitoring Indian Economy
"In March 2020, the labour participation rate fell to an all-time low, the unemployment rate shot up sharply and the employment rate fell to its all-time low," he added.
The labour participation rate in March 2020 was 41.9 per cent. It was 42.6 per cent in February and 42.7 per cent in March 2019. "We had feared a fall in labour participation rate because of the national shutdown to contain the spread of coronavirus. But, this fall seems to have happened even before the lockdown. Of course, it gets much worse as we move into the lockdown," said the report.
Even after the coronavirus scares settles in India, close to 13.6 crore jobs may be at risk.
Industry body CII said that more than half of the tourism and hospitality industry can go sick with possible loss of over 20 million jobs if recovery in the industry stretches beyond October 2020.
The script is similar in many other services industries, in manufacturing and non-manufacturing sectors such as construction. Lower growth because of falling demand and supply constraints would not only make fresh job creation tougher, but also hurt those who are currently employed.
According to report by Mint, overall, about 136 million non-agricultural jobs are at immediate risk, estimates based on National Sample Survey (NSS) and Periodic Labour Force Surveys (PLFS) data suggested. These are people who don’t have a written contract and include casual labourers, those who work in non-registered nano businesses, registered small companies, and even the self employed.
While the daily-wage earners are bearing the brunt in the first phase of retrenchments, companies across industries could pink-slip employees on short-term contracts next. Over five million Indians have job contracts less than a year in tenure.
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