Analysing the results of Periodic Labour Force Surveys, the EPFO subscription data and the MGNREGA enrolment details, the Economic Survey has seen signs of improvement in the labour market.

It said the urban labour market had shown signs of improvement before the lockdown in terms of labour force participation rate, worker population ratio and unemployment rates. “However, the nation-wide lockdown imposed in late March 2020 adversely impacted the urban labour market. In the first quarter of 2020-21, the unemployment rate for urban sector rose to 20.8 percent. The LFPR and WPR in urban sector also declined significantly during this quarter,” the Survey said.

It claimed that with the revival of economy in the subsequent quarters of 2020-21, all three labour market indicators showed a swift recovery. “The UR gradually declined during this period to reach 9.3 per cent in Q4 of 2020-21. The UR for males as well as females, aged 15 and above, recovered to the pre-pandemic levels. Both the LFPR and WPR for males as well as females, aged 15 and above, almost reached their pre-pandemic levels during the last quarter of 2020-21,” the Survey said.

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Summary of the Economic Survey 2021-22

EPFO subsriptions decline

Owing to the large impact during lockdown, the net addition to EPFO subscriptions declined and turned negative in April-May 2020. It implies that a net exit was registered from the scheme. “With the unlocking of the economy and easing of restrictions, the EPFO subscriptions bounced back swiftly, reaching 12.2 lakh in September 2020. The net additional subscription witnessed a decline again in November 2020 and also during the second wave of Covid-19 (April-June 2021). However, the magnitude of decline in both the cases was less compared to that during April-May 2020,” the Survey said.

The latest payroll data of EPFO, according to the Economic Survey, showed that the net addition in EPF subscribers reached 13.95 lakh during November 2021, which translates into growth of 109.21 percent from November 2020, and a growth of 25.65 percent from October 2021.

“Thus, the monthly net addition in subscriptions during 2021 has not only been higher than the corresponding monthly values in 2020, but they have also surpassed the levels of the corresponding months during the pre-pandemic year 2019. This points to the formalisation of the job markets as well as new hiring,” the Survey said.

MGNREGS demand peaks

Terming it an indicator of rural labour markets, the Survey said MGNREGS employment peaked during the nation-wide lockdown in 2020. The demand for MGNREGS work has stabilised after the second Covid wave, aggregate MGNREGS employment is still higher than pre-pandemic level.

“During the second wave, demand for MGNREGS employment reached the maximum level of 4.59 crore persons in June 2021. Nonetheless, after accounting for seasonality, the demand at an aggregate level still seems to be above the pre-pandemic levels of 2019. For some States like Andhra Pradesh and Bihar, the demand for work under MGNREGS has reduced to below the pre-pandemic levels during the last few months,” the Survey said.

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