Economy

Job market turning vibrant since last two months: RBI paper

G Naga Sridhar Hyderabad | Updated on October 23, 2021

Unemployment rate fell to 6.86% in September, it says

Tiding over the Covid-19 blues, the job market is seeing an upswing since the last two months, according to a research paper by the Reserve Bank of India (RBI).

According to the paper, recovery trends across various sectors have been noticed in the last two months. “The entry level hiring is growing at a faster pace led by IT, education, healthcare and pharma,” the RBI paper said.

Organised sector labour market too has been showing positive trends. The labour participation rate improved to 40.66 per cent in September, the highest in the past 12 months.

“As a result, the employment rate (worker population ratio) rose to 37.87 per cent, its highest in the last eight months. The unemployment rate slumped to 6.86 per cent in September from 8.32 per cent a month ago,” it said.

Cititng organised labour market data of Employees’ Provident Fund Organisation (EPFO) and the Employees’ State Insurance Corporation (ESIC), the RBI said the the impact of the second wave on employment has been “relatively muted.”

Labour market recovery is likely to be almost complete with the number of workers employed in September 2021 nearing levels seen in September 2019.

Policy

On the drivers for the recovery, it said policy measures to address constraints faced by the telecom sector; and the PLI scheme for textiles,auto and drone industries are imparting confidence in the recovery.

Consequently, policy support for a sustained and inclusive recovery may be needed for longer. In particular, the choice of policy mix will need careful consideration and sensitivity as it is expected that employment may weigh on the recovery, with people having lost incomes and jobs, and those that have jobs have lost purchasing power, it said.

“Already, hiring prospects are brightening ahead of the festivals. India will need policies that channel these energies to regain the demographic dividend,” the RBI said.

Published on October 22, 2021

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