More Than 6 Million Salaried Jobs Lost In November 2021 In India: CMIE

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The Logical Indian Crew

More Than 6 Million Salaried Jobs Lost In November 2021 In India: CMIE

The Centre for Monitoring Indian Economy mentioned that though the overall unemployment rate has decreased, unemployment in the urban regions of the country still continues to increase.

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The pandemic has had severe, long-lasting impacts on the people and economies. Several companies could not manage their work with the new work from home setup, while others had no business, and the reserve fund could not provide for their employees. Thus, millions of people in the working class have lost their jobs in November 2021, let alone the data for the entire year. The Centre for Monitoring of Indian Economy (CMIE) revealed that more than six million salaried jobs were lost in November only. While the overall employment rate has shown signs of slow and steady recovery, the trend is negative in the country's urban regions.

The total unemployment rate for the rural and urban population stood at 7.8 per cent in October but dropped mildly to 7 per cent in the succeeding month. On a similar note, the employment rate increased by a small proportion from 37.28 per cent in October to 37.34 per cent in November. In numerical terms, 1.4 million people were employed between October and November. However, the data continues to present unfortunate and untoward initiatives.

Performance On Labour Participation Rate

The Labour Participation Rate (LPR) saw a slip in November. Though smiled, the LPR slipped from 40.41 per cent to 40.15 per cent in November. The worrisome factor is that this was the second consecutive month that witnessed a slip in the LPR. Cumulatively, from October to November, the data saw a drop of 0.51 per cent, which is quite significant in the rate as compared to the average of preceding months, apart from the initial lockdown phase, which was followed by an economic shock. The LPR before the first wave of COVID-19 stood at 43 per cent, which declined to about 39 per cent in June 2021, immediately after the second wave caught the country off guard. The LPR recovered steadily in the second quarter of the fiscal to reach 40.7 per cent by September 2021. But then it slid back to 40.4 per cent in October and then to 40.2 per cent in November.

In comparison to the world, India shows a lousy performance concerning LPR. The World Bank had said that the modelled LPR estimate by the International Labour Organization was 58.6 per cent, and the ILO model places India with a 46 per cent LPR. Since India is the second-most populous country, its LPR significantly influences the global LPR rate. The World Bank modelled ILO estimates show that only 17 countries have performed below India in the LPR index, and most of them belong to the middle east region. These are countries such as Jordan, Yemen, Algeria, Iraq, Iran, Egypt, Syria, Senegal and Lebanon. Several of these countries are oil-rich nations that cannot be ignored while calculating their LPR. However, India has been unlucky in oil privileges, and neither has it had civil disturbances like the abovementioned countries. Therefore, India's LPR at par with middle-eastern countries could have drastic economic implications.

Declining Rate of Urban Employment

The employment data also shows a structural disappointment for India. Experts and government cannot ignore that employment is falling faster in urban areas than in rural areas. As a result, the share of the urban population is also declining. The urban population accounted for more than 32 per cent of the total employment in India in the financial year ending 2017. In 2019-20, the year just before the pandemic struck India, the share of urban work dropped to 31.6 per cent. Fast-forward to 2021, the employment further fell to 31.3 per cent, and in November, the rate stood at 31.2 per cent. The rapidly declining rate of urban work shows the job market's weakness, which is not good news for the Indian Economy.

Since urban jobs definitely provide a better salary and are most often categorized at the 'organized job market', their decline would impact the overall quality of employment in the country. In November 2021, when India recorded the creation of 1.4 million new jobs, the urban job market experienced a downfall of more than 0.9 million. Nonetheless, the job drops in the urban market are compensated by the creation of more than 2.3 million rural jobs, the data mentioned.

Loss of 6.8 Million Salaried Jobs

Since the urban jobs are falling, and companies are laying off their employees day-in and day-out, the number of salaried employment is also an understandable consequence. While India saw a massive decline of 6.8 million in salaried jobs, entrepreneurs declined by 3.5 million. On the other hand, the daily wage workers and small traders witnessed an increase of more than 11.2 million people. The shift provides us with a bird's eye view of the change in the quality and preference of jobs. At 77.2 million, salaried jobs were 9.7 per cent lower in November 2021 than in November 2019.

While India's Gross Domestic Product (GDP) got back on the pre-COVID levels in the second quarter of 2021-22, the real GDP during the quarter amounted to ₹35.7 trillion, 8.4 percent higher than its year-ago level and 0.3 per cent higher than its corresponding pre-Covid level of ₹35.6 trillion. Compared to the first quarter of 2021-22, this is a considerable improvement. GDP in the first quarter was 9.2 per cent lower than its pre-Covid level because of the second wave of infections and consequent curbs on mobility and business operations imposed by state governments.

While it is acceptable to celebrate the minute things in life, especially after the pandemic taught us the importance of little things, we must not forget that changes like the decline in urban employment, low LPR, and a massive shift in the quality of jobs preferred, we should not compromise the country's economic growth. Loss of jobs would burden and cripple the Indian Economy all the more. Increasing taxes on essential commodities like petrol and diesel would not solve the government's budget deficit challenge, which has been widening in the last few years. The administration can ensure that all the welfare policies have reached the grassroots of the Economy because every change begins at home.

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