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After minor job losses in February and March, India’s second pandemic wave crashed across the labour market in April, erasing at least 7.35 million jobs.

Data from the Centre for Monitoring Indian Economy (CMIE) showed that the number of employees, both salaried and non-salaried, fell from 398.14 million in March to 390.79 million in April, in the third straight month of falling jobs. In January, the number of people employed in India was 400.7 million, CMIE data showed.

April also saw a fall in the employment rate and labour force participation rate, and a sharp increase in the number of people who are unemployed
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April also saw a fall in the employment rate and labour force participation rate, and a sharp increase in the number of people who are unemployed (Paras Jain/Mint)

The job losses come in a month of exploding covid cases, leading to business and mobility curbs across many parts of the country.

April also saw a fall in the employment rate and labour force participation rate, and a sharp increase in the number of people who are unemployed, yet not actively looking for employmentwhich economists and experts attribute to the closure of economic activity and a lack of appetite in the jobs market.

“Unlike in March, the mass impact of the second wave was felt in April. While in 2020 there was a national lockdown, this time it was not a national one. The states and regions took charge and imposed partial or full curbs. In practice, it shrank economic activities, and instilled fear which is real due to the infection spread. The first place where you will see the impact is the labour market," said Arup Mitra, a professor of economics at the Institute of Economic Growth, Delhi University.

“The fall in the number of people employed is massive and it encompasses regular salaried workers, casual workers and self-employed. There are three problems now in the labour market—fall in the number of employed people, fall in labour force participation and the rise in people unemployed yet not looking for jobs. It’s a critical situation," explained Mitra.

According to CMIE, the employment rate fell from 37.56% in March to 36.79% in April , hitting a four-month low. The monthly data also showed that the number of people who were unemployed yet not actively looking for jobs has increased from 15.99 million in March to 19.43 million in April. “The increasing number of unemployed people not actively looking for jobs suggests people have withdrawn from the labour market; one, the infection has now spread to rural India; and, two, due to closures, there are not enough jobs available. Look at formal sectors like retail, hospitality, tourism and travel industries, and look at informal and semi-formal segments workers who were in household jobs, office support systems, etc. They have gone down significantly in April," he added.

Mitra said the unemployment rate is just one aspect of the larger job market, and it must have increased in both national, urban and rural markets. According to CMIE data, national unemployment rate in April climbed to 7.97% as against 6.5% in March and 6.89% in February, and urban unemployment increased to 9.78% as against 7.27% in March.

“The demand in the market has come down, reverse migration has picked up; but due to the availability of transport like road and rail, it was not that visible like last year. The next two-three months will be crucial and the job market stability will depend on how well we manage the crisis. But the good part is salaried jobs in urban India are not getting impacted like last year as businesses have developed resilience and they had already reduced headcount significantly in 2020 and a further cut in human resource will impact their operations and revenue," said K.R. Shyam Sundar, a labour economist.

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