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Dip in unemployment in Q4 2020: Survey

Our Bureau New Delhi | Updated on September 09, 2021

“Any level of unemployment above five per cent is not a good sign for economic growth”   -  The Hindu

Worker Population Ratio in urban areas reached near pre-Covid level

The results of the Periodic Labour Force Survey (PLFS) for the quarter between October and December, 2020 showed marginal increase in the Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), Activity Status – Current Weekly Status (CWS) and a dip in unemployment rate when compared to the second and third quarters of 2020, which witnessed lockdown to control Covid 19 pandemic.

The results were released by the National Statistical Office (NSO) here on Thursday.

The unemployment rate for urban areas for the 15 years and above age group was 10.3 per cent during the quarter against 7.8 per cent in the same quarter in 2019 and 9.1 per cent in January-March, 2020 and had touched 20.8 per cent in April-June, 2020 and in July-September, 2020, 13.2 per cent. The unemployment rate among women is 13.1 per cent and among men in 9.5 per cent.

The Worker Population Ratio in urban areas reached almost the level of pre-Covid situation, according to the report. It was 44.1 in October-December, 2019 and in the corresponding quarter of 2020 it is 42.4 per cent. Similarly, the LFPR has reached 47.3 per cent in October-December, 2020 similar to the figure of 47.8 per cent in the corresponding quarter of 2019.

Sridhar Kundu, Senior Economic Analyst at the Indian School of Business said the quarterly PLFS report confirms that there is a gradual decline in unemployment rate measured by CWS during April and December, 2020. “Opening of the economy after the lockdown and various rural development policies like higher resource allocation under MGNREGA has helped to absorb some amount of migrant labour force in the rural areas,” Kundu said.

‘Not a good sign’

He said the 10.3 per cent of unemployment as estimated by PLFS does not count the disguised unemployment and underemployment. “Even 10.3 per cent of unemployment does not present any kind of V-shaped economic recovery during the post lockdown period. Any level of unemployment above five per cent is not a good sign for economic growth,” Kundu said. He added that the opening up of the economy has not been success in raising aggregate demand in the short run. “In this case, flexible wage rate in some sectors where demand is more elastic could be one policy to maintain equilibrium,” Kundu suggested.

Published on September 09, 2021

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