India’s Jobless Rate Jumps to 27.1%, Survey Says
The unemployment rate spiked in the week ended May 3, CMIE’s Mahesh Vyas wrote
(Bloomberg) -- The world’s biggest lockdown forced 122 million people out of jobs in India last month, according to estimates from a leading private sector think tank.
Employment plunged in April after the government imposed a 40-day lockdown in a nation of 1.3 billion people, forcing businesses to shut and pushing up the jobless rate to 27.1% in the week ended May 3, surveys by the Center for Monitoring Indian Economy Pvt. showed.
Daily wage workers and those employed by small businesses have taken a massive blow, according to CMIE. These include hawkers, roadside vendors, workers employed in the construction industry and many who eke out a living by pushing handcarts to rickshaws.
“This is not just a mind-boggling number,” Mahesh Vyas, chief executive of CMIE wrote in the Business Standard newspaper. “It is a human tragedy because these are perhaps, the most vulnerable parts of society.”
The estimates of India’s job losses are more than four times the 30 million Americans who’ve filed for unemployment benefits over six weeks. The data could get worse in India with the lockdown extended in many areas, CMIE warned.
“Initially, a lockdown only hurts the most vulnerable labor that is informally employed in unorganized sectors,” Vyas said. “Gradually, it starts hitting the more secure jobs. Startups have announced lay-offs and industry associations have warned of job losses.”
The government began easing restrictions in some areas this week, resulting in violence and chaos as liquor stores reopened and transport resumed for migrant workers stranded during the lockdown.
Despite the rising unemployment and misery, Prime Minister Narendra Modi’s popularity seems to be unshaken. His approval rating rose to 83% on April 21 from 76% in January, according to Morning Consult, a U.S.-based survey and research firm.
The economic crisis will be one of Modi’s biggest tests. Standard Chartered Plc this week forecast the economy will probably shrink 2% in the fiscal year to March 2021, with the budget deficit widening to 7.3% of GDP.
The CMIE figures show more people are also looking for jobs amid the downturn. The labor participation rate rose to 36.2% in the week ended May 3 from 35.4% previously, Vyas said.
The government doesn’t publish regular jobless data, with investors relying on surveys from CMIE to give them guidance on the labor market. The last official figures from the government, released in May 2019, estimated the unemployment rate at 6.1% in the year to June 2018.
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