Unemployment rate in India falls in May, but decent jobs a distant dream

Tribune News Service

New Delhi, June 2

Although unemployment rate still remains above the 20 per cent mark, the total number of employed in India increased by 2.1 crore during the month of May, according to data released on Tuesday by the Centre for Monitoring Indian Economy (CMIE).

The biggest addition of 1.44 crore jobs was in the categories of small traders and wage labourers. As many as 55 lakh businesspeople returned to their jobs in May.

The month of June is likely to generate more jobs report because in the last week of May, the unemployment rate fell to 20.2 per cent – the lowest unemployment rate recorded since the imposition of the lockdown. However, most of the initial improvements will be of poor quality jobs.

The sole segment that did not see any increase in jobs was that of the salaried employees which declined from 6.84 crore in April to 6.83 crore in May as compared to 8.6 crore in 2019-20.

“Salaried jobs are relatively difficult to get. And, salaried jobs lost during a lockdown are far more difficult to recover. These are also the better jobs. The continued loss of good quality jobs is therefore worrisome,” noted CMIE.

Another worrisome trend was that jobs were not generated for 25-29 year olds who principally seek better quality jobs. The partial lifting has so far brought back informal jobs of the self-employed. “Salaried jobs will increase in a meaningful sense only when investments increase. This is a distant dream,” said its analyst.

Though the job market improved over the April situation when nearly 12.2 crore were unemployed, the figures for May show that over 10 crore people are still out of jobs. The employment market in April was 28.20 crore which has risen to 30.3 crore in May as the lockdown was being gradually eased.

In comparison, employment in 2019-20 averaged 40.40 crore people.

“While the main labour market metrics indicate an improvement in May compared to April, the labour market conditions still remain much weaker than they were before the lockdown,” said CMIE.

The reason was that a number of people who had left the active labour markets in April returned back in May. Those who had left the labour market in April had parked themselves in the passive unemployed category – they were unemployed and willing to work but not actively looking for jobs.

In May, many small traders were back as were some wage labourers. These segments account for about a third of the total employed population and 71 per cent of them had lost jobs in April. As the economy has been opening up gradually in parts of the country, these are back to their business. Since these are predominantly self-employed persons it was relatively easy for them to resume work when conditions permit.