With the second wave of the novel coronavirus, the unemployment rate in India has surged sharply, with one crore Indians losing their jobs. The household income has witnessed a 97 percent decline since the beginning of the pandemic in 2020, Chief Executive of Centre for Monitoring Indian Economy (CMIE) Mahesh Vyas said on Monday, May 31.
Speaking to the media, Vyas said that the unemployment rate in April 2021 went up to 8 percent Things worsened in May, with the unemployment rate surging to 14.5 percent, then became 14.7 percent in the week ended May 23. It stood at 12.15 per cent as on May 31.
Vyas said the second wave of COVID was the primary reason for the job losses. Among the unemployed, people who lost jobs in the formal sector would find it hard to get employment, as the opportunities in the sector take up over a year to come back, whereas the informal sector jobs come back quickly.
The executive further said the unemployment rate of 3-4 percent must be considered normal for the Indian economy, hinting that the unemployment number will have to decline for longer before the situation improves, Livemint reported.
The think tank conducted a nationwide survey of 1.75 lakh households in April.
Of the total surveyed, only 3 percent witnessed an increase in incomes, while 55 percent reported decline in their incomes. About 42 percent of people experienced no significant shift in their incomes.
"If we adjust for inflation, we find that 97 percent of the households in the country have witnessed a decline in incomes during the pandemic," the media quoted Vyas as saying.
The labour participation rate (working-age population in an economy) also came down to 40 percent from the pre-pandemic rate of 42.5 percent, he added.