India looks at the two-digit unemployment rate, with 10 million job losses in May: CMIE

The decline in employment rates may have decreased or worsened in the last week of May, but losses will remain the same. India will close May with a two-digit unemployment rate and massive job losses

The employment situation in India is set to worsen as the nation also faces a two-digit unemployment rate. May will see India's unemployment rate decline or a limit set due to the second wave of COVID-19 infection, which is much higher than the global closure seen during the first wave. The top 30-day employment rate since May 23 has dropped by 100 points, meaning 10 million job losses, the Center for Monitoring Indian Economy (CMIE) said.

"The only time the unemployment rate reached double the number was when India was shut down by a heavy line across the country in April and May 2020. it shows that even these boundaries are hurting the economy, "said Mahesh Vyas, CEO of CMIE.

While the estimated decline in employment may have decreased or worsened in the last week of May, losses will remain the same, Vyas said. India will close in May with a double-digit unemployment rate, declining employment, and massive job losses, he warned.

In the weeks leading up to May 16 and May 23, the unemployment rate reached 14.5% and 14.7%, which is much higher than the 8.7 percent seen in the week ending May 8. 10 percent, "says Vyas.

Symptoms already exist. The 30-day unemployment rate on May 21 was 10.3%, rising to 10.6% on May 23, Vyas said. Worryingly, the unemployment rate has been growing in both urban and rural areas, in contrast to the general trend where the unemployment rate in cities is much higher than the unemployment rate in rural areas.

"Unemployment in urban areas entered the two-digit area on May 6 when its 30-day travel rate was 10.2%. It has risen slightly since then. On May 20 it hit 12 percent and on May 23 it was 12.7 percent," Vyas said.

To maintain its upward trend from April, the unemployment rate in the cities will end in double digits in May, for the first time since April-June 2020.

In contrast, rising rural unemployment is the latest trend in May. . After that, it dropped to 6.7 percent on May 7 before starting to rise sharply. By May 23 it had reached 9.7, "Vyas writes in his report.

These unprecedented rural unemployment numbers confirm the inclusion of a larger MGNREGS, he added.

This continued growth of unemployment across the board is likely to lead to job losses in May. We say this because there is no increase in staff participation (LPR) which could have led to an increase in the unemployment rate, the report said.

LPR was 39.98 percent in April 2021. On May 23, it was 40.01 percent. Also, an increase in the unemployment rate indicates a decrease in employment during the month.

"If the unemployment rate were to rise with the LPR increase, it would be speculated that the increase in the unemployment rate was due to an increase in the number of job seekers who were unable to find work. However, this is not the case.

Job losses are also reflected in the declining employment rate in May 2021, Vyas said. The employment rate was 36.8 percent in April 2021, while the average 30-day employment rate on May 23 was 35.8 percent. This fundamental point that falls at the employment level translates into a decline in ten million orders of employment, he said.

Employment has been declining since January 2021 and there has been a 10 million decline between January and April 2021. May 2021 could see a similar fall, warns Vyas.