India’s unemployment rate climbs to 27.1%, 121.5mn out of work: CMIE

India’s unemployment rate climbed to a staggering 27.1% in the week ended 3 May and some 121.5 million Indians were out of jobs in April as India continues to be on a lockdown mode to prevent the spread of covid-19, showed data from the Centre for Monitoring of Indian Economy.

According to CMIE data, 91.3 million including daily wagers and those working with small traders were out of jobs in April followed by 18.2 million employment loss of entrepreneurs, and 17.8 million among salaried class. The data showed that some 5.8 million farmers went back to work as farming activity picked up post April 20 due to a staggered easing of lockdown in parts of India, providing a silver line in the current scenario.

The ongoing lockdown, one of the biggest in the world, closed businesses pushing up the jobless rate to 27.1% in the week ended May 3. This a rebound of unemployment situation that had improved to 21.5% in the week ended 26 April over the week before (26.19%).

Just not the all India unemployment rate, the urban and rural unemployment rate too jumped in the week ended 3 May. While urban unemployment rate climbed almost 8 percentage point in the above time period over the week ended 26 April, the rural unemployment jumped to 26.16%, up from 20.88%.

The CMIE data showed that India's overall weekly unemployment rate started its climb from 6.74% on 15 March to 26.19% in week ended 19 April. The unemployment figures, however, decreased to 21.05% in the week after.

The covid-19 pandemic hit at a time when India’s economy was already slowing due to persistent financial sector weaknesses, and post the lockdown economic activity has come to a halt resulting in massive job loss and wage loss. India has reported over 46,700 covid-19 positive cases so far including death of 1584 people in the country.

Several rating agencies and multi-lateral organizations have lowered the growth forecast for India in a post covid world. The government finds itself staring at a precipice with the International Monetary Fund slashing its FY21 growth projection for India to just 1.9% from 5.8% projected in January. Barclays cut its growth forecast for the country to 0% for 2020.