Data Focus

Jobs totter back as industries recover from Covid-19 blues

Surabhi Mumbai | Updated on November 07, 2020

Firms may opt for more contractual, temporary hiring

Job creation is picking up gradually after months of distress, per recent data.

Data from the Centre for Monitoring Indian Economy (CMIE) reveal that India’s unemployment rate has been slowly recovering. At 6.67 in September, it was the lowest in over a year, though it inched up marginally to 6.98 per cent in October. The rate had touched a high of 23.52 per cent in April amid the national lockdown.

Interestingly, in October, the rural unemployment rate was on the lower side at 6.9 per cent, while in urban centres it was relatively higher at 7.15 per cent.

“The fall in September (to 6.7 per cent) was significant from 8.4 per cent in August,” said Mahesh Vyas, MD and CEO of CMIE.

CMIE arrives at the unemployment rates using its Consumer Pyramids Household Survey machinery.

Covid-19 has impacted salaried jobs too and this is also evident from the TeamLease Employment Outlook Report for April to September. This report had said the ‘Intent to Hire’ had plummeted to 18 per cent, which was less than a fifth of its value over the past four-and-a-half years, marking a drop of 79 per cent.


“This is the single biggest fall measured over the entire course of the Employment Outlook reports,” it had said.

According to Amit Vadera, Assistant Vice-President, TeamLease Services, there has been some uptick in employment in sectors such as delivery and logistics on a month-on-month basis.

“The outlook for employment could improve for the fourth quarter this fiscal and gradually move to pre-Covid-19 levels but companies may choose to hire more on a contractual or temporary basis rather than a permanent basis for now,” he observed. This could continue till there is more certainty on the economic outlook and a Covid vaccine is made available, he cautioned.

The EPFO’s payroll data showed that the number of new entrants to the scheme climbed to 6.69 lakh in August, a 34 per cent jump from 5.51 lakh in July. Entrants to the scheme had reached a low of 1.85 lakh in April.

Long-term trend

“The long-term trend seems to be of falling labour participation rates, falling employment rates and rising unemployment rates. The lockdown has made the situation worse. I do not see any correction to this worsening labour market conditions. India is not generating sufficient jobs to arrest this deterioration,” Vyas said.

A full recovery in the labour market, which was already subdued even before the pandemic broke out, will eventually hinge on the economic recovery, experts note.

Published on November 06, 2020

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