1.5 million Indians Lose the Job in August

Date:

Haryana and Rajasthan, among states striving against high unemployment rates. 

The unemployment rate in India went up by 8.32% in August. Around 1.5 million people working in both formal and informal sectors lost jobs in the last month, the Live Mint published. The unemployment rate has risen both in rural and urban areas despite recovering from the pandemic hit situation.  

The Centre for Monitoring Indian Economy, which is a Mumbai based non-government entity, reports that the employment rate has gone down to 397.78 million in August from 399.38 million in July.

The data also suggests that around 1.3 million job loss declares from the rural areas alone. The unemployment rate in urban India went up around 1.5 percentage points. 

The unemployment rate increased to 9.78% in August from 8.3% in July, compared to 10.07% in June, 14.72% in May and 9.78% in April. The rate has been high each month ever since the second wave of Covid-19 hit the economy. 

What is the unemployment rate?

 According to Investopedia, the unemployment rate is the percentage of the labour force that stands jobless. It is an economic indicator. When the economy flourishes, more jobs are created, bringing down the unemployment rate. 

Whereas when a country faces a slowdown and struggles with job scarcity, the unemployment rate rises.  

It is the proportion of the labour force with no jobs at a given time. The Bureau of Labor Statistics calculates the rate.  

 Unemployment in India

 India has known to be one of the fastest-growing economies in the world. It is on this part that makes India a member of G20 significant economies along with BRICS countries. But India’s growth has not been satisfactory as compared to other nations like China.  

India’s manufacturing sector holds the majority share in economic development, as most of the country’s population works in this sector.

But as the country faced decades of large trade deficits (imports exceeding the exports), the business activity has been slow. Economists consider trade deficits a threat to developing economies, according to a report published by Statista.com. 

 Covid-19 impact on the unemployment rate

 Second wave-hit India experienced acute levels of the economic shutdown. With disrupted labour force and industries shut, over 10 million Indians lost their jobs. Around 97% of households’ income has declined since last year’s pandemic effect, said Mahesh Vyas, the Centre for Monitoring Indian Economy (CMIE).

It also stated that while the informal sector might quickly get back to the average level, the formal sector might take longer to come back. This was published in an article by Live Mint. 

An article in The Guardian states that the number of machines assisting household chores increased, whereas the need for calling back domestic workers declined. LG alone reported an increase of 400-500% in dishwashers. It was the record for the year 2020-2021. Sales of vacuum cleaners tripled, a Dyson salesman said.  

Government launched remedies

Indian Finance Minister Nirmala Sitharam announced a 22 billion relief fund. She told reporters that this is for the poorest and those in immediate need of money.

But according to some Economists like Jayanti Ghosh, an economics professor at Jawaharlal Nehru University, a much more stimulant amount was required to provide relief to the migrant workers who became unemployed suddenly.  

Hiring scenario at present

The job portal Indeed India reported an increase in hiring activity. The increasing levels report from the IT sector. IT software roles saw a rise of 19% from 2020 to 2021. At the same time, other IT roles saw an 8-16% increase since last year.  

The job portal added that the IT sector and jobs related to housekeeping and caretaking have also increased by 60% between July 2020 and July 2021.  

With hopes of the economy picking up its pace, more job-related opportunities are coming out for Indians. But how long will the recovery take and the third wave in picture speculations are hard to make. 

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