35 Lakh Indians Losts Jobs In November; Unemployment Rate At An All-Time High
Despite the numbers of employment has risen earlier in the second quarter, the employment condition in India fell from the growth trajectory since the beginning of the third quarter of this fiscal quarter.
Initially, the employment dropped to 20.3 percent on-year in Q1 amid the nationwide lockdown due to the Covid-19 virus spread.
Although it has shown a positive contraction of 3.5 percent in Q2 as the economy started to recover.
Then again the reported improvement has lost its momentum in Q3, despite the economy showing more signs of recovery.
Increase In Job Shedding
During October, 50,000 jobs were lost.
According to CMIE’s Consumer Pyramids Household Survey, November witnessed a much higher shedding of jobs at 35 lakhs.
In November 2020, employment stands at 39.36 crore, which is still about 1 crore short of what it was in the March 2020 quarter.
More workers joined the workforce in the search of jobs in the first three weeks of December.
Although it had added a marginal improvement in aggregate employment compared to November, it also resulted in the rising unemployment rate in the first three weeks.
On one side, the employment rate marginally rose from 37.4 percent in November to a three-week average of 37.5 percent.
Fall In GDP
But, the unemployment rate also rose from 6.5 percent to 9.5 percent in the same duration.
The employment numbers are expected to stand at nearly 39.5 crores by the end of the third quarter.
This implies that employment in Q3 FY21 would be 2.5 percent lower than the 40.5 crores employed in Q3 FY20.
It is estimated that the economy would shrink marginally less than it did in the September 2020 quarter as employment and economic growth are believed to be closely associated with each other.
During Q2, the Indian economy shrank by 7.5 percent in Q2, registering a record fall of 23.9 percent in the first quarter.
It is noteworthy here that during both quarters, real GDP fell more sharply than employment.