The unemployment rate shot up to a 12-month high at 11.9 per cent in May compared to 7.97 per cent in April as most states remained under lockdown amid the second wave of Covid-19, data from the private think tank Centre for Monitoring Indian Economy (CMIE) shows.
Unemployment for June 2020 had come down to 10.18 per cent after it touched its peak of 23 per cent amid severe lockdown curbs in May 2020. The high unemployment rate for May reflects joblessness across urban and rural areas. Urban and rural areas account for 14.73 per cent and 10.63 per cent unemployment rate, respectively.
It is a significant increase from April when urban unemployment stood at 9.78 per cent and 7.13 per cent, respectively.
"Thanks to the second wave of Covid-19, India's economic recovery process is stalled. India needs household incomes and their sentiments to improve substantially before it can hope that they would contribute to the recovery process," CMIE said in its weekly analysis.
The second Covid-19 wave has hit India hard. CMIE CEO Mahesh Vyas has said that over 10 million or 1 crore people lost their jobs because of the second wave of coronavirus. He added that 97 per cent of households' incomes have declined since the beginning of the pandemic last year.
The high unemployment rate for May signifies that about 1 crore people lost their jobs in this period, said Vyas. He expects the situation to get better as the economy opens up but does not believe that it will be solved entirely. Many experts opine that the second wave of infections has peaked, and states will slowly start to ease the economic activity-impacting restrictions in a calibrated fashion.
Credit: Business Today | June 3, 2021