IN labor market appears to have recovered from the devastating impact of the second wave of the pandemic, when unemployment declined by the end of July and economic activity (LFPR) and employment rose.
However, the revival was driven primarily by agriculture and real estate. The mining and manufacturing sectors, by contrast, have lost millions of jobs, while employment data in the services sector remained largely unchanged, monthly data from the Center for Monitoring Indian Economy (CMIE) showed Sunday.
On the positive side, the country’s unemployment rate fell to 6.95% in July from 9.17% in June. July figures are the lowest in at least four months. The unemployment rate stood at 6.5% in March, just ahead of a second wave that disrupted economic recovery and claimed hundreds and thousands of lives. The urban unemployment rate in July, which stood at 8.3%, and the rural unemployment rate, which stood at 6.34%, were also separately at their four-month lows.
Monthly July LFPR was 40.17%, better than June’s 39.57% and also the best in four months with the same number recorded in March 2021. A higher LFPR means more people are looking for work and is indicative of a revival of jobs. market. In addition, the employment rate in July rose to 37.38%, which is also a four-month high.
In terms of total headcount, 399.38 million people were employed in the country at the end of July, in both paid and unpaid positions. This is almost 16 million more than in June.
However, most of these supplements were related to agriculture, which absorbed 163.25 million people, just over 11 million more than in June. This was followed by the real estate and construction sector, which received 5.5 million more people than in June.
In contrast, the number of people working in the manufacturing sector fell from 29.65 million in June to 28.87 million in July. Likewise, the number of workers in the mining sector fell from 1.59 million in June to 1.14 million in July.
Employment in the service sector remained virtually unchanged and amounted to 14.19 million in July against 14.13 million in the previous month.
The surge in absorption in agriculture and real estate may have helped restore general labor market parameters such as LFPR and employment, but showed that more people are employed in less productive agricultural work in the absence of decent non-farm jobs, thus rising hidden unemployment, experts argued. …
They noted that the job market has a long way to go, judging by several market parameters.
“Traditionally, July is a month when agricultural activity in rural India is at a high level due to monsoons reaching almost all parts of the country. So it will be in 2021. However, the large portion of the labor market working in the agricultural sector, while other key sectors are not doing well, hints at hidden unemployment. More people doing the same job is not good either in terms of productivity or income, ”said Arup Mitra, professor of economics at the Institute for Economic Growth at Delhi University.
“Job creation in the mainstream sector is lagging behind. Payroll data from the Staffing Fund Organization show that the main sectors are not absorbing people. This is due to a poor economic environment, an impending pandemic and low market demand due to income and job losses, ”explained KR Shyam Sundar, a labor economist.
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