The Centre for Monitoring Indian Economy (CMIE) has stated that India’s unemployment rate has moved into double-digits, which is abnormal for the country. India will close May with double-digit unemployment rate, falling employment rate and substantial loss of employment. The 30-day moving average employment rate as on May 23 has fallen by 100 basis points, marking a loss of 10 million jobs, it added in a statement.
The only time the unemployment rate lurched into double-digits was when a stringent nationwide lockdown was announced during April and May 2020. While there is no similarly draconian lockdown now, several local restrictions restrain mobility in varying but distinctly milder degrees. The double-digit unemployment rate seen in recent times indicates that even these restrictions are taking a toll on the economy.
This is evident in the data gathered by CMIE. In the weeks ended May 16 and May 23, unemployment rate had reached 14.5% and 14.7%, which is much higher than 8.7% than in the week ended May 8. What is of greater concern is that the unemployment rate has been growing in both urban as well as rural regions. This is removed from the usual trend where urban unemployment rate is much higher that the rural unemployment rate.
Employment has been falling since January 2021 and has seen a 10 million decline between January and April 2021. May 2021 could see a similar fall, CMIE warned.
Recently, Moody’s revised its forecast for India’s economic growth in the current financial year downwards to 9.3% from an earlier projection of 13.7%. It has also denied any chances of a sovereign upgrade in near future. The rating agency joined several analysts who revised their GDP forecasts for India following a debilitating second wave of COVID-19 infections with higher cases of fatalities.
