Economy

CMIE estimates 23% spike in unemployment rate during lockdown

Our Bureau New Delhi | Updated on April 07, 2020

The employment rate fell to an all-time low of 38.2 per cent in March 2020.

The Covid-19 crisis may impact the job scenario in the country with the Centre for Monitoring of Indian Economy (CMIE) projecting that unemployment rate could spike to over 23 per cent once the lockdown is lifted.

According to a post on the agency’s website on Tuesday, “Labour statistics for March 2020 are worrisome. And, that for the past two weeks are much worse. In March 2020, the labour participation rate fell to an all-time low, the unemployment rate shot up sharply and the employment rate fell to its all-time low.” Based on the survey, the unemployment rate is estimated to rise to 23.4 per cent during the week-ended April 5 from 8.7 per cent for the whole of March.

Mahesh Vyas, chief executive officer of CMIE, wrote in the post that though the survey was suspended last week, those on the field on March 24 and 25 continued to report observations. And, by March 30, the agency managed to get observation reports over telephone. As a result, CPHS (Consumer Pyramids Household Survey) had 2,289 observations in the last week of March, which were evenly spread over rural and urban areas.

“The unemployment rate during this last week was 23.8 per cent. Labour participation rate (LPR) fell to 39 per cent and the employment rate was a mere 30 per cent. Telephonic interviews caught pace in the week-ended April 5. We had 9,429 observations. These yielded an unemployment rate of 23.4 per cent during this week; an LPR of 36 per cent and an employment rate of 27.7 per cent,” he said.

Dismal job scenario

Experts feel this number could rise steeply as migrant workers return to home town/villages. Also, there is no government register tracking labour movement, especially in the unorganised sector on a regular basis. Given this, CMIE’s weekly survey is cited for presenting the job scenario in India.

Vyas added that the employment rate fell to an all-time low of 38.2 per cent in March 2020. The fall since January 2020 is particularly steep; it seems to have nosedived in March after having struggled to remain stable over the past two years.

The labour participation rate in March 2020 was 41.9 per cent; it was 42.6 per cent in February and 42.7 per cent in March 2019. We had feared a fall in labour participation rate because of the national shutdown to contain the spread of coronavirus. But this fall seems to have happened even before the lockdown. “Of course, it gets much worse as we move into the lockdown,” he said.

The labour force consists of persons who are employed, unemployed and actively looking for jobs. Between January and March, the number of employed has fallen from 411 million to 396 million and the number of unemployed has risen from 32 million to 38 million.

So, the 9 million fall in the labour force consists of a 15 million fall in the count of employed and a 6 million increase in the number of unemployed.

Published on April 07, 2020

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